Comcast reported mixed results before the bell on Tuesday, missing revenue estimates due to tough year-over-year comparisons for its movie studio and theme parks.
However, the company's streaming service, Peacock, continued to turn a profit. Comcast shares fell about 4% in early trading.
Here's how Comcast performed, compared with estimates from analysts surveyed by LSEG:
- Earnings per share: Adjusted $1.21 vs. expected $1.12
- Revenue: $29.69 billion versus the expected $30.02 billion
In the quarter ended June 30, net income fell 7.5% to about $3.93 billion, or $1 per share, compared with $4.25 billion, or $1.02 per share, in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, fell about 1% to $10.17 billion.
The company's revenue fell nearly 3% to $29.69 billion compared with the same period last year. Revenue from the content and experiences segment, which includes the NBCUniversal television business, theme parks and Universal Pictures, fell 7.5% to $10.06 billion.
Universal Pictures studio revenue, in particular, fell 27% to $2.25 billion, a tough comparison to last year, which saw the release of “Super Mario Bros.” and “Fast X,” one of Comcast’s best box office quarters ever. Comcast is looking ahead to the rest of the year’s film slate, including this summer’s blockbuster “Despicable Me 4” and “Twisters,” and the upcoming release of “Wicked” in November.
Broadband Strategy Manual
The cable industry as a whole has seen broadband customer growth decline in recent quarters as fewer Americans buy and move homes and competition for home Internet from wireless providers increases.
Although Comcast lost customers in some of its key units, the losses were not as deep as feared, according to Wall Street estimates.
The company said it lost 120,000 broadband customers, 110,000 of them residential, during the quarter, compared with a loss of about 142,000 expected by StreetAccount.
Despite recent competition and headwinds in the broadband industry, Comcast Chairman Mike Cavanagh said on Tuesday's earnings call that “it remains at the core of our strategy.” He highlighted the company's total customer base of more than 32 million.
Revenue from the segment that includes Xfinity-branded broadband, cable TV and wireless fell 1.5% to $17.82 billion due to further declines in the cable TV business. Comcast lost 419,000 cable TV customers during the quarter, still below the 502,000 expected by analysts, according to StreetAccount.
Domestic broadband revenue growth, which rose 3% to $6.57 billion due to price increases, will remain a focus, Cavanagh said.
The company's wireless business continued to grow, with the number of its customer lines up 20% compared with last year, to 7.2 million. The combination of home Internet and wireless has remained key, with 90% of Xfinity's smartphone traffic being carried over its Wi-Fi network, Cavanagh said Tuesday.
The recent end of the federal government's Affordable Connectivity Program, which provided subsidies to low-income consumers, will likely have a bigger effect on third-quarter earnings. However, Comcast executives said Tuesday that the company has been proactive and focused on migrating ACP customers to other broadband plans.
Slowdown in theme parks
Theme park revenue fell nearly 11% to $1.98 billion as attendance normalized compared with a record 2023 figure.
Last quarter, the theme park segment began to cool following the strong post-Covid lockdown attendance surge in 2023. More recently, competition from cruises and international tourism, particularly due to the strong US dollar, has put pressure on US theme parks.
Comcast acknowledged it had under-invested in new attractions in Florida ahead of the opening of its new park, Epic Universe, in 2025, adding that that had played a role in declining attendance.
Comcast executives said Tuesday they remained “optimistic” about the future of the theme park business: “While park results are below our original expectations for the year, we still view parks as an excellent long-term growth business for us,” Cavanagh said.
Peacock collection
NBCUniversal's television business posted revenue of $6.32 billion, up 2% from a year ago.
NBCUniversal’s answer to streaming, Peacock, continued to be a bright spot for the company. The streaming service posted its best year-over-year growth, with paid subscribers up 38% to 33 million. Revenue from the streaming service rose 28% to $1 billion.
Peacock also boosted media segment adjusted EBITDA, which rose 9% to $1.36 billion.
Peacock-related losses were $348 million, a significant improvement from the $651 million loss in the same period last year.
The streaming service has benefited especially from NBC's live sports, with Sunday Night Football, Premier League and Nascar among Peacock's most popular shows. The service also received a boost during the first quarter due to the exclusive National Football League Wild Card game that aired.
Executives hope NBCUniversal’s bid for National Basketball Association media rights will further boost the streaming service as well as its broadcast and cable networks.
Cavanagh said Tuesday that the company does not expect its 11-year rights deal with the NBA to be affected by Warner Bros. Discovery's intention to match rights to one of the NBA packages.
NBC will have 100 regular-season games on the cable network and Peacock beginning in the 2025-2026 season, as well as postseason games, the All-Star Game and WNBA games as well. Peacock will have exclusive rights to approximately 50 regular-season and postseason games.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
