Comcast Beats on Q2 Earnings as NBCU TV Revenue Offsets Box Office Decline
It was a good quarter for Telemundo to have the World Cup
Tony Maglio | July 26, 2018 @ 4:09 AM
Last Updated: July 26, 2018 @ 7:48 AM
Comcast missed analysts’ forecasts for revenue in Q2 2018 but beat on earnings projections, with no help from the Universal Pictures movie revenue which dropped 36 percent year over year.
Wall Street forecast Q2 EPS (earnings per share) of 60 cents on $21.86 billion in revenue, per a Yahoo Finance compilation. Comcast reported 65 cents of earnings on $21.286 billion in revenue.
The good news (and the less-bad news) can be credited to the company’s cable-providing arm, NBCUniversal television, and (a little bit) to its theme parks division. Filmed entertainment? Not so much.
All told, Comcast’s cable communications division, the one that provides cable TV and high-speed internet, grew its revenue from Q2 2017 by 3.4 percent. That’s not a huge percentage, but considering it is still Comcast’s largest business, it’s a nice win.
While NBCU’s overall revenue was basically flat, the results were a tale of two different sized screens. Cable TV saw an 8.2 percent revenue growth and broadcast rose 6.7 percent. Some of that over-the-air success can be attributed to Telemundo airing its first ever FIFA World Cup. Meanwhile, filmed entertainment dropped 20.2 percent versus the comparable quarter last year, with a 35.5 percent fall at the box office. Revenue at the theme parks increased 3.4 percent.
The movie-theater falloff was explained in Comcast’s financials due to an unfavorable comparison with last year’s second quarter, which included the “Fate of the Furious” release. Home entertainment releases didn’t compare favorably either, as that revenue stream slipped 32.8 percent from 2017 when NBCU made available “Fifty Shades Darker,” “Sing,” “Split” and “Get Out.”
Comcast Chairman and CEO Brian L. Roberts seemed pleased with the results .
“We delivered fantastic results in the second quarter, including robust free cash flow of $4.3 billion. At Cable Communications, we added 182,000 customer relationships, largely driven by our addition of 260,000 broadband customers, which was the highest second quarter result in 10 years,” he said in prepared remarks accompanying the financial release. “These strong customer metrics were balanced with robust EBITDA growth, fueled by high-speed Internet and business services.”
“NBCUniversal’s performance was highlighted by continued momentum in affiliate revenue at our cable networks business, and Telemundo presented its first ever FIFA World Cup which set multiple records for the network,” Roberts continued. “Additionally, we are excited about the new attractions that we opened at each of our theme parks during the quarter, and pleased with the theatrical performance of ‘Jurassic World: Fallen Kingdom.’ Overall, our successful results in the first half of 2018 underscore the strength we see across Comcast NBCUniversal.”
Comcast recently bowed out of the sweepstakes for much of 21st Century Fox’s portfolio, ceding that bidding war to Disney. The NBCUniversal parent company is instead focused on its pursuit of U.K. media giant Sky, which also has another suitor — Fox. You’ve heard of a love triangle, this whole thing has been kind of a love square. In Q2, Comcast incurred $31 million in costs associated with its bids for both Fox and Sky.
Shares of CMCSA stock closed at $33.42 on Wednesday afternoon, up three pennies apiece. The regular U.S. stock markets reopen their trading day at 9:30 a.m. ET. Pre-market, things are going well, as shares of CMCSA are trading up nearly 2.5 percent as a result of Comcast’s Q2 EPS exceeding expectations.
Comcast executives will host an investor call at 8:30 a.m. ET to discuss the quarter in greater detail.
9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.
Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion
In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion
The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion
This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion
After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion
The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion
Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion
The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion
CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion
The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix
1 of 10
Rewind 2017: Media and content consolidation continued this year
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.