Comcast on Thursday reported third-quarter earnings that beat analyst estimates, despite seeing revenue slightly decline and continued softness in broadband customer growth.
Shares jumped 8% in premarket trading.
Here’s how Comcast did in the third quarter of 2022 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Earnings per share: 96 cents, adjusted vs. 90 cents expected
- Revenue: $29.85 billion vs. $29.65 billion expected
The company said it added 14,000 broadband customers during the third quarter – an improvement from the second quarter, when Comcast didn’t add any new customers for the first time ever. Still, it’s a sign that cable broadband providers are facing increased competition from telecom and wireless internet companies.
The slowdown in new customers is hitting the cornerstone of Comcast’s business, similar to peers like Charter Communications and Altice USA. AT&T said last week building out its fiber-optic network remains a priority for the company, and it added 338,000 new customers during the quarter.
Comcast’s revenue declined 1.5% to $29.85 billion compared with the same quarter last year, when the company’s NBCUniversal unit reaped more advertising dollars from airing the Tokyo Olympics on its TV networks. The company also recorded non-cash impairment charges related to its Sky business in the U.K.
Its adjusted earnings before interest, taxes, depreciation and amortization rose 5.9% to $9.5 billion compared to the same period last year.
Meanwhile, Comcast’s cable unit, which includes pay-TV, mobile and traditional phone services in addition to broadband, saw revenue increase 2.6% to $16.5 billion. The company said broadband revenue jumped 5.7% due to an increase in average rates and the number of its residential broadband customers.
Its Xfinity Mobile business, which was launched five years ago and relies on Verizon’s wireless network, now has 5 million customer lines.
Comcast lost 561,000 pay-TV customers, a continued quarterly decline that the company and its peers have been experiencing in recent years due to the rise of streaming services.
Peacock, the company’s fledgling streaming service, surpassed 15 million paying customers, an increase of more than 70% year-to-date, the company Thursday.
Revenue for the NBCUniversal unit dropped about 4% to $9.6 billion when compared to the same quarter last year, when the Tokyo Olympics took place and added $1.8 billion in revenue to the media segment. NBCUniversal’s media segment is comprised of its broadcast and cable TV networks and streaming.
Due to the absence of the Olympics, the media segment’s revenue declined roughly 23% to $5.23 billion. It would have been up 4.4% excluding the Olympics. Advertising revenue for the segment was down 35% for the same reason, although the company said that was partially offset by an increase in advertising revenue from Peacock.
NBCUniversal’s movie studios revenue was up 31.4% to $3.2 billion due to higher theater and content licensing revenue. The company said theater revenue in particular nearly doubled to $673 million mainly due to the releases of Jurassic World: Dominion and Minions: The Rise of Gru.
NBCUniversal Jeff Shell recently said on CNBC that he believed that the company’s movie business has been performing well on the hybrid model of releasing some films simultaneously in theaters and on streaming service, Peacock – such as its latest installment of the Halloween franchise – while still waiting to make other available to viewers at home, such as Minions.
The company’s theme park business kept up its strong rebound since the early days of the covid-19 pandemic, when theme parks were shuttered. Revenue rose more than 40% to $2.1 billion as more people swarmed theme parks during the quarter.
In the U.K., Comcast’s Sky saw revenue fall 14.7% to $4.3 billion, but said that excluding the impact of currency change, its revenue was consistent with the same quarter last year. Sky’s total customer count increased by 320,000 to 23 million, boosted by streaming customer additions.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
