Comcast beat first-quarter earnings expectations on Thursday as broadband boosted revenue whilst the corporate and its rivals reported slow customer growth.
Here’s how Comcast in comparison with estimates from analysts surveyed by LSEG:
- Earnings per share: $1.04 adjusted versus 99 cents expected
- Revenue: $30.06 billion versus expected $29.81 billion
In the quarter ended March 31, net income rose 0.6% to $3.86 billion, or 97 cents per share, compared with $3.83 billion, or 91 cents per share, a 12 months earlier. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, fell 0.6% to about $9.4 billion.
The company’s revenue rose 1.2% to $30.06 billion in comparison with the identical period last 12 months. Revenue from the domestic broadband customer segment boosted growth as rates rose, whilst Comcast lost 65,000 customers through the quarter.
Shares of Comcast were down about 6% on Thursday.
Broadband problems
Cable broadband corporations’ subscriber growth has declined in recent quarters, weighing on stock prices.
The slowdown in home buying and selling because of high rates of interest has led to a decline in recent residential web connections. Cable providers are also facing increased competition for home broadband from wireless corporations similar to B. affected T Mobile And Verizon.
Comcast President Mike Cavanagh said on Thursday’s earnings call that the market is “extremely competitive,” especially for “cost-conscious customers.”
Earlier this month, Comcast announced that it might launch NOW, a prepaid and monthly low-cost web and phone plan program. The plan is designed to supply fixed WiFi options at a low price.
The plan complements Comcast’s longstanding Internet option for low-income customers called Internet Essentials.
Company executives don’t expect any improvement within the near term, especially given the expected end of the federal government’s Affordable Connectivity Program (ACP), which offers qualified low-income households a $30 discount on broadband services.
Comcast’s wireless business saw subscriber growth of 21% within the quarter, totaling 6.9 million connections. The company lost 487,000 cable TV customers through the quarter as consumers continued to change to streaming.
Hot movies, cool theme parks
A billboard for the film “Oppenheimer” in Times Square in New York City, on July 29, 2023.
Adam Jeffery | CNBC
The company’s theme parks adjusted EBITDA decreased 3.9% to $632 million within the quarter because of a rise in operating expenses similar to higher marketing and promoting costs in addition to the negative impact of foreign currency.
On Thursday, Cavanagh noted that Orlando theme park attendance was “under some pressure” within the last quarter as the corporate was within the means of introducing recent attractions. He added that the corporate is confident in regards to the long-term growth and future prospects of its parks.
Increasing competition, particularly from cruises, also weighed on theme parks, Comcast Chief Financial Officer Jason Armstrong said on Thursday’s earnings call.
Revenue from the media business, which incorporates NBCUniversal, and the studios also fell. The three corporations now report in the identical segment, which together saw revenue increase 1.1% to $10.37 billion.
Still, Comcast executives praised the strength of Universal Pictures’ film slate, from recent Oscar winners “Oppenheimer” and “The Holdovers” to imminent, highly anticipated movies similar to the difference of the Broadway hit “Wicked.”
Peacock, which executives also called a shiny spot and a catalyst for NBCUniversal, can be reaping the advantages of the film program.
Being the exclusive home of “Oppenheimer” when it was first released on streaming earlier this 12 months proved to be a win for the platform. Comcast said it was the most-watched film in Peacock’s history.
The service added three million paid subscribers through the quarter, bringing its total subscriber count to 34 million. The exclusive National Football League Wild Card game on Peacock helped attract after which retain more customers than expected, executives said on Thursday’s earnings call.
“We’ve been at a point for 3.5 years where we’re really having success in our approach,” Cavanagh said Thursday, citing the strength of the mix of sports and entertainment.
While Peacock is thought for its big selection of live sports programming, including the NFL and the Premier League, Cavanagh said subscribers spend 90% of their time on non-sports programming similar to the Peacock original “Ted” and the Universal film collection. He added that the corporate expects Peacock to have “real pricing power” over time.
The streamer’s revenue rose 54% to $1.1 billion in comparison with the identical period last 12 months. While domestic promoting was flat through the quarter, the corporate saw its domestic distribution revenue increase, driven by growth at Peacock. Media corporations are facing a soft promoting marketplace for longer than expected.
Losses from Peacock weighed on the segment, offsetting higher sales. The company reported an adjusted EBITDA lack of $639 million related to Peacock within the quarter. However, this improved from an adjusted EBITDA lack of $704 million in the identical period last 12 months.
Peacock’s losses are expected to peak in 2023, and executives expect them to narrow in coming quarters. The Olympic Games in Paris this summer are also expected to drive growth for the streaming service.
With more hours of the Olympics on its network NBC, along with Peacock, the corporate is on course to generate the best promoting revenue for the Olympics in its history.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
