Comcast Beats on Q2 Earnings as NBCU TV Revenue Offsets Box Office Decline

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.

Also Read: Disney Chief Bob Iger's Response to Comcast Bowing Out of Fox Sweepstakes: 'Holy Crap'

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.”

Also Read: Comcast Increases Bid for Sky to $34 Billion

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.”

Also Read: Comcast Drops Bid for Fox Assets to Focus on Sky Instead

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.