Comcast Corp. topped analysts’ estimates for profit in the first quarter even as the media and telecommunication conglomerate continues to lose cable TV subscribers and faces increasing competition in broadband services.
(Bloomberg) — Comcast Corp. topped analysts’ estimates for profit in the first quarter even as the media and telecommunication conglomerate continues to lose cable TV subscribers and faces increasing competition in broadband services.
The company, which offers wireless mobile and broadband internet services under the Xfinity brand and owns the NBCUniversal media and entertainment empire, reported earnings excluding one-time items of 92 cents a share on $29.7 billion in revenue. The results were boosted by gains at its studio and theme park businesses, which opened Super Nintendo World at Universal Studios Hollywood in February. Analysts were looking for profit of 83 cents a share on $29.4 billion in sales.
Shares rose 4.1% in premarket trading in New York. They are down 18% over the past 12 months.
The company was rocked last weekend by the abrupt ouster of Jeff Shell, the chief executive officer of NBCUniversal, who was fired after it was disclosed he had an inappropriate relationship with an employee. Comcast President Mike Cavanagh has taken charge of the business, and will have to steer the company through a complex set of challenges, from a struggling streaming service to the hemorrhaging of cable TV subscribers. The company says it’s not immediately seeking a replacement for Shell.
Comcast added 5,000 customers to its cornerstone broadband service, an area where the company is investing heavily to gain market share and strengthen its brand. Analysts were looking for a loss of about 7,900 internet subscribers, reflecting a reversal from a pandemic surge and a fierce rivalry with wireless broadband and fiber-based home connections.
Cord cutting and competing wireless and fiber competition has eroded Comcast’s traditional customer base. To fight back, the Philadelphia-based company has raised rates and bundled wireless service to try and offset lost revenue. In the first quarter, the company lost 614,000 TV subscribers and gained 355,000 wireless customers.
Comcast’s streaming service Peacock saw a 63% increase in subscribers from a year earlier, bringing the total to 22 million. The video service had an adjusted loss before interest, taxes, depreciation and amortization of $704 million on revenue of $685 million. Analysts predicted an adjusted Ebitda loss for Peacock of $727.9 million on $718 million in sales.
Cavanagh has said that Peacock losses will probably reach a low point of $3 billion this year, though the company hasn’t given a time frame for when it expects to reach a profit. Comcast has spent heavily on Peacock, a late entrant in the streaming wars that still trails behemoths like Netflix and Amazon Prime.
Comcast’s theme parks were a bright spot in the quarter, as tourists returned following a pandemic dropoff, boosting adjusted Ebitda by 46%. The Super Mario Bros. movie, which was released in theaters in April and distributed by Universal Pictures, could help sustain growth in the current quarter, Bloomberg Intelligence analyst Geetha Ranganathan wrote in a note.
(Updates shares in third paragraph.)
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