Comcast reported stronger-than-expected earnings for the first quarter on Thursday, despite experiencing a decline in its broadband customer base amidst intensifying market competition.
The company recorded a 1.7% increase in domestic broadband revenue, reaching $6.56 billion. However, it also reported a loss of 199,000 broadband customers over the same period, highlighting the ongoing challenges within its core business as alternative internet services, including 5G, proliferate.
Following this announcement, Comcast’s stock dipped by over 5% in premarket trading.
In contrast, its mobile segment, which is less than a decade old, showed positive growth. Revenue from this division surged approximately 16% to $1.12 billion, with the addition of 323,000 new lines, bringing the total to about 8.15 million Xfinity Mobile lines.
During the previous quarter’s earnings call, Comcast’s leadership indicated a strategic pivot towards the mobile sector in response to the declining broadband subscriptions. To support this shift, the company has revamped its mobile offerings and brought in a new chief growth officer.
In addition to broadband losses, Comcast also faced a decrease in its cable TV subscriber numbers, shedding 427,000 customers as traditional television packages continue to falter. The company operates its broadband, mobile, and pay television services under the Xfinity brand.
In its earnings report for the period ending March 31, Comcast’s actual performance contrasted with analyst expectations as follows:
- Earnings per share: $1.09 adjusted vs. 98 cents expected
- Revenue: $29.89 billion vs. $29.77 billion expected
The company reported a net income of $3.38 billion, down 12.5% year-over-year from $3.86 billion, corresponding to 89 cents per share compared to 97 cents a year earlier. After accounting for one-time expenses such as tax costs and asset value adjustments, reported earnings per share stood at $1.09.
Adjusted EBITDA increased by nearly 2%, amounting to $9.53 billion, while overall revenue declined slightly to $29.89 billion from $30.06 billion the previous year.
This revenue was bolstered by what Comcast refers to as its “growth businesses,” encompassing mobile services, the streaming platform Peacock, business services, residential broadband, as well as revenue from studios and theme parks. The company is poised to spin off its portfolio of cable networks, including Finance Newso, in a transaction likely to conclude this year.
Revenue from the media segment, which comprises NBCUniversal, grew around 1% to $6.44 billion, with the film studios division seeing a 3% rise to $2.83 billion.
The media branch benefitted from gains in Peacock, which boosted its adjusted EBITDA by 21% to $1 billion, considerably influenced by the streaming service. Peacock’s revenue increased by 16%, and its quarterly loss narrowed to $215 million, down from $639 million during the previous year’s quarter.
Peacock ended the fiscal year with 41 million paid subscribers, surpassing analyst projections of 37.21 million for the quarter, as reported by StreetAccount, compared to 36 million at the close of the previous fiscal year.
In light of recent trends, competitors such as Disney and Warner Bros. Discovery have achieved profitability in their streaming platforms, adapting to a focus on ad-supported models and implementing measures against password sharing to improve financial stability.
However, NBCUniversal’s revenue from theme parks dipped by 5% to approximately $1.88 billion, largely due to decreased visitor numbers during a quarter impacted by wildfires in Los Angeles.
Comcast is preparing for the May 22 opening of Universal Epic Universe, its first major theme park development in Florida in 25 years. The company described this new venture in its Thursday release as “the most ambitious parks experience ever created,” with over 50 attractions planned.
Additionally, a new Universal Horror Unleashed attraction is set to launch in Las Vegas in August, while a Universal Theme Park and Resort is also being planned in the U.K.
Disclosure: Comcast owns NBCUniversal, the parent company of Finance Newso.
