- Comcast posted revenue of $29.29 billion and an adjusted profit of $1.07 cents per share, compared to revenue of $29.22 billion and a profit of 99 cents per share expected by Wall Street analysts, per Yahoo Finance
- The quarterly results come as the Brian Roberts-owned media conglomerate remains on track to spin off NBCUniversal and Sky into a separate, publicly traded company next year
- Comcast shares climbed more than 2% on Thursday following the results
Ahead of its spinoff from Comcast, NBCUniversal’s streaming and studios businesses continued to show strength, with a second consecutive quarterly profit at Peacock boosted by the World Cup and a whopping 76% increase in theatrical revenue driven by Christopher Nolan’s “The Odyssey,” Illumination’s “Minions & Monsters” and indie breakout “Obsession.”
But those gains were weighed down by continued softness in the theme parks business, as well as an ongoing downturn in Comcast’s broadband and video division, which faces “irrational competition.” Though the Brian Roberts-owned media conglomerate beat Wall Street expectations, its overall adjusted profit slid 7.3% to $3.8 billion, or $1.07 per share, and revenue tumbled 6.1% to $29.3 million.
In response to its continued challenges in broadband and video, Comcast plans to restructure the division, which will include an unspecified number of layoffs. The reorganization will result in a charge of over $1 billion in the fourth quarter. Its the latest company to shake up its workforce, following Netflix last week and Disney last month, as the industry faces a shifting landscape.
“The competitive environment demands that we execute at a higher level, move faster and operate more efficiently. We’re taking decisive steps to change how we operate, structurally improve our cost base, and create greater capacity to invest in growth,” Comcast co-CEO Mike Cavanagh told analysts on Thursday. “We have embarked on the most significant operating and cost transformation in our company’s history, with an opportunity we believe will ultimately amount to billions of dollars over time.”
In addition to the results, Comcast declared a quarterly cash dividend of 33 cents per share, which will be paid to shareholders of record in January. Shares were up more than 2% on Thursday following the results.
World Cup, Peacock profitability streak boost media unit
Comcast’s content and experiences business, which includes NBCUniversal, Sky and its Universal theme parks, grew total revenue 6.5% to $10.54 billion, while profits climbed 29.3% to $1.8 billion.
The World Cup boosted media revenue 13% to $5.4 billion, while profits came in at $769 million, compared to $247 million in the prior year period. That was driven by a 14.6% increase in ad revenues and 22.4% bump in distribution revenues.
Peacock delivered a profit of $261 million, swinging from a loss of $217 million in the prior year period. Streaming revenue also grew 34% to $1.3 billion, driven by higher distribution and advertising and its August price increase, while total subscribers held steady at 48 million.
The streaming service is not out of the woods yet. Looking ahead, Cavanagh warned that Peacock’s profits would be “lumpy” in future quarters depending on when rights kick in for different sports properties.
In 2027, YouTube Premium will add Peacock Premium, which will extend the service’s reach and accessibility while introducing NBCU’s content and brands to a new and younger audience. Additionally, NBCU is extending its multi-year distribution agreement with YouTube TV and will expand the reach of its international streaming services Universal+ and Hayu through YouTube Premium in select markets. The distribution of YouTube, YouTube TV and YouTube Premium will similarly be extended on Comcast’s Xfinity and Xumo platforms.
Executives remain open to bundling Peacock with other partners, but emphasized that they would have to be careful not to cannibalize the existing business.
“Fragmentation and diversity are the reality of the media and entertainment landscape. No one company can serve every consumer with everything,” Cavanagh said. “We believe being a closed shop or walled garden serves both a company and consumers poorly. Our core strategy is to combine our exceptional content and distribution with select partners and third-party IP to reach audiences wherever they choose to engage.”
‘The Odyssey,’ ‘Minions & Monsters’ box office offsets content licensing decline
Meanwhile, the studios business saw profits surge 18.6% to $402 million, but revenue fell 1.1% to $2.97 billion.
Theatrical revenue surged 76.6%, driven by the box office performance “The Odyssey” and “Minions & Monsters,” as well as a carryover benefit of “Obsession.” Universal also crossed $5 billion at the domestic box office during the quarter.
But those gains were offset by a 23.7% drop in content licensing revenue due to the timing of TV content available during the quarter.
Theme parks drag on lower admissions, higher operating costs
Elsewhere, the theme parks business saw profits drop 17% to $780 million and revenue fall 4.4% to $2.6 billion due to lower revenue from admissions and higher operating costs at its domestic theme parks.
“While we continue to see near-term demand pressure across portions of the parks business, including in Orlando and certain international markets, we view these trends as temporary rather than structural,” Cavanagh said.
In addition to macroeconomic and geopolitical headwinds, Cavanagh noted that Universal’s competitors were quicker to anticipate and recognize softness in demand and adapt their marketing strategies. He also said the company is taking action to address “capacity challenges and ride throughput” at its Epic Universe theme park.
Though attendance, guest spending and overall financial performance in the theme parks business are “materially above” where they were two years ago, Comcast expects continued softness through the first half of 2027, with a return to growth in the second half of the year. However, executives warned that path “may not be linear.”
Broadband and cable business to face cost cuts amid continued downturn
The connectivity and platforms business was also a major drag on the results, with revenue declining 2.6% to $19.7 billion and profits dropping 4.4% to $7.6 billion as it shed 144,000 residential broadband and 274,000 video customers.
Executives said the company would take a charge of over $1 billion in the fourth quarter related to a reorganization in its broadband and cable business that will result in layoffs. It will also increase investment in wireless, accelerate the adoption of AI and launching new products and features.
“We don’t look at it as a cost-cutting exercise,” Comcast Chief Financial Officer Jason Armstrong said. “This is the ability to simplify in order to move faster, to be more nimble in decision making, and I think really create capacity to invest for growth.”
Comcast also remains open to “strategic discussions and partnerships.” The company’s current connectivity partners include Starlink, Verizon and T-Mobile.
NBCUniversal spinoff on track for next year
The latest quarterly results come as the company’s plans to spin off NBCUniversal and Sky into a separate, publicly-traded company remain on track for next year. Cavanagh said the company is “well into the execution phase,” which includes building the standalone public company infrastructure.
“While there is still significant work ahead, we have a clear path to completion, and remain focused on creating two companies with the strategic flexibility, financial strength, and leadership to compete and grow independently,” he continued. “We have tremendous confidence in the future of both companies. Each has significant structural advantages, a strong competitive position, and substantial opportunities for long-term growth and value creation.”
In addition to the planned spinoff from Comcast, Sky has entered into a $2.1 billion deal to acquire ITV’s media and entertainment business, which includes its linear channels and the ITVX streaming platform, as well as “The Great British Bake Off” producer Love Productions.
ITV, which reaches around 40 million people each week and serves over 16.5 million monthly digital users, would account for around 20% of all in-home viewing in the U.K. when combined with Sky — second to the BBC and ahead of YouTube.
U.K. Secretary of Culture, Media and Sport Lisa Nandy has said she’s “minded to intervene” in the deal and asked both companies to address her concerns by this past Tuesday. If she ends up issuing an intervention notice, the Competition and Markets Authority and Ofcom would review the deal and its impact on the public interest and competition.
Under the terms of the deal, Sky News and ITV News will stay editorially distinct going forward. It also includes $1.6 billion in cash and up to $267 million in performance-related earn-out and $2.8 billion in content spend with ITV Studios, which will remain a separate entity, over the next five years. The deal is expected to generate $267 million in annual cost savings three years after its closing.
