Comcast beat analysts’ expectations by releasing its first-quarter earnings report on Thursday, despite slowing household broadband growth and rising Peacock losses.
The company’s shares rose by greater than 5%. The stock is up greater than 4% this yr to Wednesday’s close.
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Here are Comcast’s results in comparison with the estimates of analysts polled by Refinitiv:
- Earnings per share: adjusted 92 cents versus expected 82 cents
- Revenue: $29.69 billion vs. $29.3 billion expected
For the quarter ended March 31, Comcast reported earnings of $3.83 billion, or 91 cents a share, compared with $3.55 billion, or 78 cents a share, a yr earlier. Adjusting for one-time items, Comcast reported earnings per share of 92 cents for essentially the most recent period.
Revenue fell 4% to $29.69 billion from $31.01 billion within the prior-year period, with the corporate noting that it broadcast each the Super Bowl last yr and the Beijing Olympics in the primary quarter.
The Philadelphia-based company said its first-quarter adjusted profit before interest, taxes, amortization and amortization rose 3% to $9.42 billion in the primary quarter.
Comcast said it returned $3.2 billion to shareholders within the quarter through a mix of a $1.2 billion dividend payout and a $2 billion share buyback.
At the top of the three-month period, Comcast had 21,000 fewer broadband customers in comparison with last yr, adding just 3,000 throughout the quarter. It received a small boost from its business clients. Company executives warned earlier this yr that Comcast was more likely to lose broadband subscribers in the primary quarter.
Still, it was an indication that Comcast, like its peers, was still fighting slowing growth within the broadband industry. Executives said that while the churn rate may be very low, growth has stagnated – especially because the early days of the Covid pandemic – as they face increased competition from telecommunications and wireless service providers.
Comcast executives said in Thursday’s earnings call that the corporate expects adding subscribers to be likely a challenge within the near future, but will give attention to average revenue per user to drive revenue within the segment.
Xfinity’s mobile business grew to almost 5.67 million customers throughout the quarter, demonstrating that its wireless service – provided along with a contract to make use of Verizon‘s network – stays a vivid spot.
Cable customers continued their exodus from the normal bundle, with Comcast losing 614,000 subscribers throughout the quarter.
Last month, Comcast announced it was changing the way in which it reports its segments, now grouping its broadband, cable TV and wireless services under the Xfinity brand with Britain’s Sky, which incorporates Sky-branded pay TV services and entertainment TV channels, creating “connectivity and platforms” . Total segment revenue was roughly $20.15 billion, a slight decrease from the last quarter as a result of foreign currency impact.
The second segment, content and experiences, covers all of NBCUniversal’s TV and streaming business, Sky Sports’ international networks and channels, in addition to film studios and theme park units. Total segment revenue fell nearly 10% to $10.26 billion within the quarter.
Media industry revenue fell in the primary quarter, dropping about 20% to $6.15 billion, as a result of a comparison to last yr when NBC aired the Super Bowl and had the rights to the Beijing Olympics for its TV and Peacock networks. Even so, Comcast said that excluding an extra $1.5 billion in revenue from these two major sporting events, media revenue continued to fall by about 2%.
A tightening promoting market showed up on Comcast’s balance sheet this quarter, as with similar corporations Paramount Global and Warner Bros. discovery. Excluding the Olympic Games and the Super Bowl – two events that generate large ad revenues – domestic promoting declined by roughly 6% within the quarter, driven by lower TV network revenues and declining television viewership.
Domestic television distribution revenues increased, excluding the Olympics, which Comcast noted was mainly as a result of higher revenues from Peacock, which had more paying subscribers.
Comcast said Peacock’s subscriber base grew greater than 60% year-on-year to 22 million, and revenue increased 45% to $685 million. Peacock had a lack of $704 million, compared with losses of $456 million in the identical period last yr.
In the last quarter, the corporate noted that Peacock’s losses could be around $3 billion this yr. Streaming service costs continued to weigh heavily on media segment revenue. Directors said on Thursday they were “encouraged” by Peacock’s performance, and expected peak losses this yr could be followed by regular improvement. Comcast CEO Mike Cavanagh said the corporate is confident that Peacock will “even out and grow from there.”
NBCUniversal’s movie segment saw growth with Shrek’s animated spinoff Puss in Boots: The Last Wish and horror film M3GAN throughout the quarter, with revenues up nearly 2% to $2.96 billion.
Both Comcast CEO Brian Roberts and Cavanagh touted NBCUniversal’s animated film business in a chat Thursday, with the success of “The Super Mario Bros. Movie”, which was released earlier this month. This week it exceeded $900 million on the box office worldwide, including $444 million domestically.
“We’ve had tremendous success creating franchises,” Roberts said in a phone call Thursday, noting the “Despicable Me” and “Shrek” franchises. “This is the results of strategic decisions we made years ago to turn out to be a frontrunner in animation and conviction to take a position in business during a pandemic.”
Cavanagh noted that last yr’s episodes of NBCUniversal’s “Jurassic Park,” “Minions,” and “Halloween” helped boost his box office.
“We’re really pleased with our animation business,” Cavanagh said on Thursday.
Upcoming NBCUniversal movies include Fast X, the sequel to next month’s popular Fast and Furious series, and Christopher Nolan’s next epic, Oppenheimer, a couple of scientist who led the event of the atomic bomb during World War II. It shall be released in July.
The company’s amusement park segment has grown, especially because the parks were closed at the peak of the pandemic, with revenue increasing 25% to $1.95 billion. Revenue increased because of international parks, which were still burdened by pandemic restrictions last yr. The opening of Super Nintendo World also helped boost revenue.
Earlier this week, NBCUniversal faced upheaval after the removal of CEO Jeff Shell as a result of a sexual harassment and discrimination criticism filed by an worker. Roberts addressed the matter early on Thursday, saying it was “obviously a difficult time” for the corporate, but noting his confidence in NBCUniversal’s leadership team, which can now report back to Cavanagh.
“Think of me as if I’ve been here for some time,” said Cavanagh, referring to his future as overseeing the NBCUniversal team. He noted throughout the call that he had been near the corporate since joining Comcast nearly eight years ago and had been “deeply involved for a very long time.”
Investors also shouldn’t expect a “strategy revision” of NBCUniversal consequently of Shell’s departure alone, as a substitute they’d react “because the environment changes.”
