- Comcast reported an adjusted profit of $3.71 billion, or $1.04 per share, on revenue of $29.94 billion, beating Wall Street expectations of a profit of 97 cents per share on revenue of $29.26 billion.
- The media segment grew revenue 25.3% and profits 3.7%, driven by higher domestic advertising and distribution revenue, the FIFA World Cup, the NBA playoffs and “Love Island USA.”
- Comcast shed 167,000 broadband customers and 280,000 video customers as cord-cutting and competition continue to weigh on its business
Peacock has finally turned the corner of profitability.
The streaming service, which first launched in 2020, hit its first-ever quarterly profit of $189 million during Comcast’s second quarter on Thursday, swinging from a loss of $101 million in the prior-year period.
It also added 2 million paid subscribers for a total of 48 million, driven by the NBA playoffs, FIFA World Cup and “Love Island USA.” Revenue for the service grew to $1.9 billion, compared to $1.2 billion in the year-ago period.
Peacock’s milestone comes as the media conglomerate reported an overall adjusted profit of $3.71 billion, or $1.04 per share, on revenue of $29.94 billion, beating Wall Street expectations.
The quarter’s results also come as Comcast prepares to separate NBCUniversal and Sky into a separate, publicly-traded company over the next 12 months. Under the terms of the split, Comcast will continue to have an ownership stake of up to 19.9% in NBCU/Sky for up to one year after the tax-free spin’s completion.
Its content and experiences business, which includes NBCUniversal, Sky and its Universal theme parks, grew total revenue 22.9% to $10.73 billion, while profits climbed 7.1% to $1.33 billion. In comparison, its connectivity and platforms business saw revenue fall 3% to $19.8 billion and profits tumble 5.8% to $7.96 billion as the company continued to shed broadband and video customers.
Shares of Comcast are up 0.77% in pre-market trading on Thursday following the results. In addition, the company reported a quarterly cash dividend of 33 cents per share, payable on Oct. 28 to shareholders of record as of Oct. 7.
FIFA World Cup, NBA Playoffs and ‘Love Island USA’ help Peacock turn the corner on profitability
The media segment grew revenue 25.3% to $5.7 billion, while profits rose 3.7% to $708 million, driven by higher domestic advertising and distribution revenue and the FIFA World Cup. When excluding the World Cup, revenue grew 15.6% to $5.3 billion.
‘The Super Mario Galaxy Movie,’ ‘Obsession’ and ‘Michael’ boost studios business
The studios business also posted a profit of $202 million as revenue grew 25% to $3.04 billion, driven by higher theatrical revenue from “The Super Mario Galaxy Movie,” “Obsession” and the international distribution of “Michael.”
“The Super Mario Galaxy Movie” has grossed over $1 billion in worldwide box office year to date, pushing the franchise’s cumulative total past $2 billion. Meanwhile, “Obsession” is Focus Features’ highest-grossing film in history with over $400 million in worldwide box office year-to-date.
Comcast’s theatrical revenue for the quarter came in at $972 million, up from $284 million a year ago. Content licensing revenue was $1.8 billion, down 0.3% from $1.81 billion a year ago, reflecting lower revenue for its film studios that was offset by higher licensing revenue at its television studios.
Theme parks business weighed down by higher operating expenses
As for the theme parks business, revenue increased 2.7% to $2.4 billion, driven by growth at its Orlando theme parks, including the impact of the successful opening of Epic Universe. But the segment’s profits fell 5.1% to $609 million due to higher operating expenses and lower international theme park revenues.
“While we are seeing some near-term softness in Theme Parks, we remain confident in the long-term opportunity, supported by our world-class brands, attractive locations and proven ability to create attractions and experiences that drive real consumer demand,” co-CEOs Brian Roberts and Mike Cavanagh said.
Cord-cutting and competition continues to ravage broadband, pay TV businesses
Comcast lost 167,000 broadband customers and 280,000 video customers for a total of 28.49 million and 10.67 million, respectively. However, the broadband losses marked a year-over-year improvement of 34,000. Wireless continued to be a bright spot, adding 448,000 lines for a total of 10.19 million.
Video revenue fell 7.8% to $6.1 billion due to the subscriber losses, while ad revenue grew 1.1% to $962 million, boosted by higher domestic political advertising and advanced advertising revenues.
More to come…
