Comcast, the media and technology company, reported mixed results for the quarter ended June 30. While the company missed revenue estimates due to tough year-over-year comparisons for its film studio and theme parks, its streaming service, Peacock, continued to make gains. Comcast’s stock was down approximately 4% in early trading.
In terms of earnings per share, Comcast reported $1.21 adjusted, compared with the expected $1.12. However, revenue came in at $29.69 billion, slightly lower than the expected $30.02 billion.
Net income for the quarter decreased by 7.5% to around $3.93 billion, or $1 per share, compared with $4.25 billion, or $1.02 per share, in the same quarter last year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell about 1% to $10.17 billion.
One area that experienced a significant decline was the content and experiences segment, which includes the NBCUniversal TV business, theme parks, and Universal Pictures. Revenue for this segment dropped by 7.5% to $10.06 billion. The Universal Pictures studio saw a particularly sharp decline of 27% to $2.25 billion. This decrease can be attributed to the tough comparison with last year when successful films like “Super Mario Bros.” and “Fast X” were released.
Looking ahead, Comcast is optimistic about its film slate for the remainder of the year. Upcoming releases such as “Despicable Me 4,” “Twisters,” and “Wicked” are expected to drive revenue growth.
In terms of broadband services, Comcast lost 120,000 customers during the quarter, with 110,000 of those being residential customers. While this represents a loss, it was not as deep as anticipated by Wall Street estimates. The company remains focused on its broadband business, which has a customer base of over 32 million.
Comcast’s mobile business saw positive growth, with a 20% increase in customer lines compared to last year. Bundling home internet and mobile services has been a key strategy for the company, with 90% of Xfinity smartphone traffic traveling over its WiFi network.
The recent ending of the federal government’s Affordable Connectivity Program (ACP), which provided subsidies to low-income consumers, may have a bigger impact on third-quarter earnings. However, Comcast executives reassured investors that the company has been proactive in migrating customers from ACP to other broadband plans.
The theme park segment experienced a slowdown in revenue, with a nearly 11% drop to $1.98 billion. This decline can be attributed to attendance normalizing after a record-setting surge in 2023. Additionally, competition from cruises and international tourism, driven by the strength of the U.S. dollar, has put pressure on the U.S. theme parks. However, Comcast remains optimistic about the long-term growth potential of the theme parks business.
NBCUniversal’s TV business saw a 2% increase in revenue to $6.32 billion. Peacock, NBCUniversal’s streaming service, continued to perform well. Paid subscribers increased by 38% to 33 million, and revenue for the streamer increased by 28% to $1 billion. The service benefitted from NBC’s live sports programming, including Sunday Night Football, Premier League, and Nascar.
Comcast executives are confident that NBCUniversal’s bid for the National Basketball Association’s media rights will further propel the streaming service, as well as its broadcast and cable networks. The company’s recent 11-year rights deal with the NBA is not expected to be affected by Warner Bros. Discovery’s intention to match the rights for one of the NBA packages.
In conclusion, while Comcast reported mixed results for the quarter, with revenue missing estimates, the company’s streaming service Peacock continued to show growth. The theme park segment experienced a slowdown, but Comcast remains optimistic about its long-term prospects. The broadband business remains a core focus, and the company’s mobile business saw positive growth. Overall, Comcast is positioning itself for future success in the evolving media and technology landscape.
