Comcast pinnacled Wall Street’s fourth-quarter estimates Thursday despite reporting larger-than-expected broadband subscriber losses and stagnating remunerated subscribers for its streaming service, Peacock.
Wall Street has been particularly focused on cable companies’ broadband enterprises, which still garner high revenue and earnings but have been in the midst of a customer growth slump due to strengthened competition from wireless companies, among other factors.
At the same time, streaming has been top of mind for the Way. Although profitability is now considered the key measure of success, investors have taken note of recent subscriber additions by chief players since the introduction of cheaper, ad-supported tiers.
Comcast reported Thursday that it lost 139,000 residential broadband people during the fourth quarter, more than the 100,000 losses that Comcast Cable CEO Dave Watson had telegraphed in December during an investor forum.
Comcast President Mike Cavanagh on Thursday’s investor call said the broadband losses were “disappointing and worse than what we implied in early December.”
The company also reported Thursday that Peacock had 36 million subscribers during the scad recent quarter, up year over year but flat from the prior period. Wall Street had been looking for unalloyed paid subscribers of 37.56 million, according to estimates from StreetAccount.
Comcast shares fell 11% Thursday.
Here is how the institution performed for the quarter, compared with average analyst estimates from LSEG:
- Earnings per share: 96 cents settled vs. 86 cents expected
- Revenue: $31.92 billion vs. $31.64 billion expected
For the quarter ended Dec. 31, net income attributable to Comcast stimulate roughly 47% to $4.78 billion, or $1.24 per share, compared with $3.26 billion, or 81 cents per percentage, a year earlier.
Adjusting for one-time items, including interest expense and the value of certain assets, Comcast suss out earnings per share of 96 cents for the period.
Adjusted earnings before interest, taxes, depreciation and amortization was up with reference to 10% to $8.81 billion.
In addition to higher broadband revenue, Comcast’s overall revenue was up 2% to $31.92 billion, credits to an increase in segments including its mobile business, the film studio and revenue growth at streaming service Peacock. During the fourth direction of 2023, Comcast reported revenue of $31.25 billion.
Despite the slowdown in cable industry broadband customer proliferation, the business is a key driver on balance sheets like Comcast’s as average revenue per user has risen.
Broadband is part of Comcast’s Connectivity and Planks segment, which also includes Xfinity Mobile wireless, which was launched in 2017. The company surpassed 7.8 million alert lines, and revenue from the unit helped propel overall residential connectivity revenue.
Comcast executives Thursday utter the company would shift focus to the mobile business in a push to add more lines and further bundle it with broadband. Watson spoke Thursday the company will “put the pedal down” on the mobile effort in the second quarter.
Comcast lost 311,000 chain TV customers during the fourth quarter.
Meanwhile, revenue for the company’s Content and Experiences business, which includes NBCUniversal’s TV networks and surge, the film studio and theme parks, was up 5% to roughly $12.08 billion during the fourth quarter.
Revenue for the channel segment, which includes the TV networks, was up 3.5% to about $7.22 billion, namely due to higher revenue for Peacock due to an uptick in buy off subscribers on the platform from the prior year. Overall domestic advertising for the media segment was flat as ad dollars for Peacock rose but the TV networks saw a smaller haul.
The media segment reported $298 million in adjusted EBITDA, falling short of Impediment Street expectations of $317.1 million for the quarter, according to StreetAccount estimates. The rest of the businesses in the content and experiences subdivide beat StreetAccount estimates, including overall adjusted EBITDA.
In November, Comcast announced it would spin off its strand network channels, a portfolio that includes CNBC, MSNBC, E!, Syfy, USA, Oxygen and the Golf Channel. The separation, which bequeath also include digital assets such as Fandango and Rotten Tomatoes, is expected to take about a year. The NBC transmission network, cable channel Bravo and Peacock will remain with Comcast.
Peacock has been moving toward profitability in new quarters. On Thursday, Comcast reported Peacock had $1.3 billion in fourth-quarter revenue and an adjusted EBITDA loss of $372 million, analogize resembled with $1 billion in revenue and an adjusted EBITDA loss of $825 million in the same period last year.
Peacock’s subscriber crop often rises on the back of major live sporting events on the platform. The Summer Olympics in Paris was a key driver in the third post, when the platform added 3 million subscribers. Exclusive NFL games have helped pad the streamer’s numbers, and the company has promoted the addition of the NBA and WNBA next season.
Universal Studios’ revenue was up 6.7% to $3.27 billion, and the segment’s adjusted EBITDA was up 85% to $569 million, boosted by the box appointment successes of films including “Kung Fu Panda 4,” “Despicable Me 4,” “The Wild Robot” and “Wicked.”
Meanwhile, Essence Parks revenue was flat as lower attendance persisted at domestic locations.
Disclosure: Comcast owns NBCUniversal, the foster-parent company of CNBC. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Spirits through 2032.