Comcast Tops Q1 Earnings Mark, Misses on Revenue as COVID-19 Impacts Theme Parks Business

Latest “How to Train Your Dragon” movie in 2019 makes for an ugly box office comparison this year

Universal_Studios_Hollywood suicide
Universal Studios

Comcast beat earnings estimates but missed on revenue in the first quarter of 2020, feeling the initial impact of the pandemic-forced closure of theme parks.

With movie theaters also shutting down due to the coronavirus, Universal’s box office ticket sales struggled. That division’s revenue also faced a tough comparison to year-ago hits like “How to Train Your Dragon: The Hidden World.”

Wall Street forecast earnings per share (EPS) of 68 cents on $26.75 billion in revenue, according to a consensus estimate compiled by Yahoo Finance. The NBCUniversal parent company actually reported EPS of 71 cents on $26.61 billion in revenue.

Comcast’s net income fell 39.6% to $2.1 billion. With adjustments, net income was $3.3 billion, which is still a 6.1% decrease.

Comcast increased its first-quarter revenue for its largest business, cable communications, which rose +4.5% to $14.9 billion, “driven primarily by increases in high-speed internet, business services and wireless revenue,” according to financial documents.

Also up from the comparable 2019 quarter was broadcast television revenue (+8.8.%), thanks to content licensing and distribution sales. Cable TV was down just a hair.

Revenue from theme parks plummeted 31.9% following the closures of Universal Studios Japan in late February and Universal Orlando and Universal Studios Hollywood in mid-March due to COVID-19.

The filmed entertainment unit saw a decrease of 22.5%, with theatrical revenue down 28.8% from 2019’s Q1. That year-ago quarter included the releases of “How to Train Your Dragon: The Hidden World,” “Us” and “Glass.” Taking on those films this year were “1917,” “Dolittle” and “The Invisible Man.” With the closure of movie theaters in mid-March due to the pandemic, the 2020 releases never really stood a chance.

All told, NBCUniversal’s revenue was down 7% from last year.

Sky revenue was down 3.7% for Comcast on a comparable basis.

Comcast lost 409,000 net video customers in Q1 of 2020. It made up for that cord-cutting elsewhere, with total Comcast customers increasing by 371,000, the best first-quarter result on record for the company.

Included in Comcast’s financial release was this statement regarding predictions for its Q2 amid the ongoing coronavirus pandemic:

“Our Cable Communications results, while strong in the first quarter 2020, will be negatively affected in the second quarter by the significant deterioration in domestic economic conditions in recent weeks and by the costs associated with our support of customer connectivity as the population increasingly works and learns remotely from home. NBCUniversal and Sky results also will be negatively impacted to a greater extent in the second quarter 2020. As a result, we expect the impacts of COVID-19 to increase in significance in the second quarter 2020 and to have a material adverse impact on our consolidated results of operations over the near-to-medium term.”

NBCUniversal launched its new streaming service Peacock exclusively for Comcast subscribers on April 15, ahead of the platform’s July nationwide rollout.

“Society is being challenged like never before in our lifetime, and I couldn’t be prouder of our company, our employees, and our leadership team across Comcast Cable, NBCUniversal, and Sky,” Brian L. Roberts, chairman and chief executive officer of Comcast Corporation, said in a statement prepared to accompany the financials. “Now more than ever the world needs to stay connected, and we’re extremely pleased that our investments in our network continue to pay off as we are handling significant increases in traffic and meeting our customers’ needs. While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate. We are distributing our content in new ways, as evidenced by the recent launch of Peacock on X1 and Flex. We’ve also taken decisive action, having moved over 95% of our U.S. call-center employees to work from home and putting in place new procedures that have allowed more than 15,000 construction workers to safely come back to work to build our theme park in Beijing. All the divisions of our company are in constant communication, and the level of collaboration has been extraordinary. We have a strong balance sheet, terrific portfolio of assets, and a world-class management team. This is a moment in time; and when it passes, I am very confident that the decisions we are making now will enable us to emerge from this crisis as a healthy, strong company that is well positioned to continue to grow and succeed.”

Comcast stock closed Wednesday afternoon at $39.00 per share, up 0.5% from where it opened at $38.82 that morning. The regular trading day for the U.S. stock markets open at 9:30 a.m. ET.

Roberts and other Comcast executives will host a conference call at 8:30 a.m. ET to discuss the first-quarter earnings in more detail.