March 4, 2024

Comcast Thursday’s first-quarter earnings report topped analysts’ expectations despite slowing growth in the cable and media giant’s residential broadband business and mounting losses at Peacock.

Shares of the company closed up 10% on Thursday.

Here’s how Comcast fared compared with estimates from analysts polled by Refinitiv:

  • EPS: Adjusted 92 cents vs. 82 cents expected
  • Revenue: $29.69 billion vs. $29.3 billion expected

For the quarter ended March 31, Comcast reported earnings of $3.83 billion, or 91 cents a share, compared with $3.55 billion, or 78 cents a share, a year earlier. Adjusting for one-time items, Comcast reported earnings of 92 cents a share for the most recent period.

Revenue fell 4 percent to $29.69 billion from $31.01 billion a year earlier, and the company noted that it aired the Super Bowl and the Beijing Olympics in the first quarter of last year.

Adjusted earnings before interest, taxes, depreciation and amortization rose 3% to $9.42 billion in the first quarter, the Philadelphia company said.

Comcast said it returned $3.2 billion to shareholders during the quarter through a $1.2 billion dividend payment and $2 billion in share repurchases.

At the end of the three months, Comcast had 21,000 fewer residential broadband customers year-over-year and added just 3,000 for the quarter. It got a slight boost from commercial customers. Company executives warned earlier this year that Comcast was likely to lose broadband customers in the first quarter.

Still, it’s a sign that Comcast, like its peers, continues to face slowing growth in its broadband business. While churn is low, growth has stagnated — especially since the early days of the pandemic — as they face stiff competition from telecom and wireless providers, executives said.

Comcast executives said on Thursday’s earnings call that the company expects adding subscribers could be a challenge in the near term, but will focus on average revenue per user to grow the unit’s revenue.

Xfinity Mobile grows to nearly 5.67 million customers in the quarter, reflecting its wireless services — delivered with usage agreements VerizonThe network — still a bright spot.

Cable TV customers continue to bleed from traditional bundles, with Comcast losing 614,000 subscribers in the quarter.

Last month, Comcast announced changes to the way it reports market segments, now combining its Xfinity-branded broadband, cable and wireless services with its U.K.-based Sky, which includes pay-TV services and Sky-branded entertainment. TV channels to form the Connectivity and Platforms section. Total revenue for the segment was approximately $20.15 billion, down slightly from the prior quarter due to foreign exchange effects.

The second segment is content and experiences, which includes all of NBCUniversal’s television and streaming businesses, international networks and Sky Sports, as well as its movie studio and theme park divisions. Total revenue for the segment fell nearly 10% to $10.26 billion in the quarter.

Revenue in the media business slumped in the first quarter, falling about 20 percent to $6.15 billion, down from last year when NBC aired the Super Bowl and its network and Peacock picked up rights to the Beijing Olympics. Even so, Comcast said media revenue was down about 2% excluding the $1.5 billion in incremental revenue from the two major sporting events.

Comcast’s balance sheet showed a tightening ad market this quarter, just as it did for its peers Paramount Global And Warner Bros. found out. Excluding the Olympics and the Super Bowl, two big ad-generating events, domestic advertising fell about 6% in the quarter, citing lower TV network revenue and lower TV ratings.

Domestic TV distribution revenue was up, excluding the Olympics, which Comcast noted was largely due to higher revenue from Peacock, which has more paying subscribers.

Comcast said Peacock subscribers rose more than 60% year-over-year to 22 million, and revenue rose 45% to $685 million. Peacock lost $704 million, compared with a loss of $456 million a year earlier.

Last quarter, the company pointed out that Peacock’s losses this year will reach about $3 billion. The cost of streaming services continued to weigh on the media division’s earnings. Executives said on Thursday they were “encouraged” by Peacock’s performance and that it would steadily improve after an expected peak loss this year. Comcast President Mike Cavanagh said the company is confident that Peacock will “break even and grow from there.”

NBCUniversal’s film division saw revenue rise nearly 2% to $2.96 billion in the quarter, boosted by the animated “Shrek” spinoff “Puss in Boots: The Last Wish” and horror flick “M3GAN.”

Comcast CEO Brian Roberts and Kavanagh both touted NBCUniversal’s animated film business on Thursday’s conference call, following the success of the “Super Mario Bros. movie” released earlier this month. .this week it Exceed It grossed $900 million worldwide, including $444 million domestically.

“We’ve had tremendous success creating franchises,” Roberts said on Thursday’s conference call, referring to the “Despicable Me” and “Shrek” franchises. “These are the result of strategic decisions we made many years ago to become a leader in animation and our belief in investing in our business amidst a pandemic.”

Kavanagh noted that NBCUniversal’s “Jurassic Park,” “Minions” and “Halloween” franchises last year helped boost the box office.

“We’re very proud of our animation business,” Kavanagh said Thursday.

NBCUniversal’s list of upcoming movies includes “The Fast and the Furious,” the next installment in the “Fast and Furious” franchise next month, and Christopher Nolan’s next epic, “Oppenheimer,” about the world’s leader in the atomic bombing. R & D scientists World War II. Will be released in July.

The company’s theme park business continues to drive higher, especially since parks closed during the height of the pandemic, with revenue up 25% to $1.95 billion. Revenue was boosted by international parks, which were still weighed down by pandemic restrictions last year. The opening of Super Nintendo World also helped boost revenue.

Earlier this week, NBCUniversal faced a shakeup with the ouster of CEO Jeff Shell following a sexual harassment and discrimination complaint filed by an employee. Roberts addressed the matter at the start of Thursday’s conference call, saying it was “obviously a difficult time” for the company, but expressing his confidence in NBCUniversal’s leadership team, which will now report to Cavanagh.

“Think I’ve been here for a while,” Kavanagh said of his oversight of the NBCUniversal team’s future. He noted on the call that since joining Comcast nearly eight years ago, he has remained in close contact with the company and has been “deeply involved for a long time.”

Investors also shouldn’t expect to see NBCUniversal “revisiting strategy” as a result of Shell’s separate departure, but instead responding “as circumstances change.”

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Correction: Comcast’s total media revenue fell more than 20%. Earlier versions misreported this number.