Comcast exceeded analyst expectations in its second-quarter report. The company managed to offset a slowdown in its broadband business with higher pricing.
Comcast also saw significant growth in its streaming service, Peacock, with the number of subscribers nearly doubling to 24 million compared to the previous year. Peacock’s revenue also increased by 85% to $820 million. However, the streaming platform’s losses continued to weigh on NBCUniversal’s media business.
Here’s how Comcast performed compared to analysts’ estimates:
- Earnings per share: $1.13 adjusted vs. 97 cents estimated
- Revenue: $30.51 billion vs. $30.13 billion estimated
In the second quarter, Comcast reported earnings of $4.25 billion, or $1.02 per share, compared to $3.4 billion, or 76 cents per share, in the previous year. After adjusting for one-time items, earnings per share for the current period were $1.13.
This was Comcast’s largest earnings beat in the past two years.
Earlier this year, Comcast restructured its reporting segments. The company now combines its Xfinity-branded broadband, cable TV, and wireless services with its U.K.-based Sky. The total revenue for this segment remained relatively flat at $20.36 billion compared to the same period last year.
During the quarter, Comcast lost 19,000 domestic broadband subscribers, but still had over 32.3 million total broadband customers at the end of the quarter.
Comcast executives had previously acknowledged the challenge of adding broadband customers in the near term and instead focused on increasing average revenue per user to drive revenue growth. The strategy paid off, with higher average rates offsetting the second-quarter subscriber losses and leading to a broadband revenue growth of 4.4%.
Comcast and its competitors have experienced slowing growth in the broadband segment after significant gains during the early stages of the Covid pandemic. Executives have attributed this to increased competition from telecom and wireless providers, as well as a decrease in Americans moving between homes.
Comcast’s Xfinity mobile business continued to grow, reaching nearly 6 million customers in the quarter.
However, Comcast continued to lose traditional cable TV customers, with 543,000 subscribers leaving during the quarter. The company now has less than 15 million total domestic cable TV customers.
Cord cutting has accelerated in recent quarters as consumers shift towards streaming. Disney CEO Bob Iger recently indicated that Disney was reconsidering the importance of its cable TV networks, potentially signaling a willingness to sell them.
Comcast’s NBCUniversal also owns several cable TV channels, including USA Network and Bravo, which provide a significant amount of content for Peacock, including live sports and next-day TV show airings.
While Peacock saw growth in subscribers and revenue, losses from the streaming platform still affected the media unit. Adjusted losses from Peacock increased to $651 million compared to $467 million in the same period last year. Comcast had previously estimated that Peacock losses for this year would amount to approximately $3 billion.
NBCUniversal is part of Comcast’s second segment, “content and experiences,” which includes TV and streaming business, international networks, Sky Sports, film studios, and theme parks. This segment generated $10.87 billion in overall revenue, up 4% compared to the previous year’s quarter.
Revenue specifically for the media business was relatively flat at $6.2 billion compared to the same period last year.
The advertising market remained soft, with domestic advertising revenue down approximately 5% to $2.03 billion. The decline in domestic advertising was mainly due to lower revenue from NBCUniversal’s TV networks, which was partially offset by increased Peacock revenue.
NBCUniversal recently concluded its upfronts discussions with advertisers for the upcoming TV season, reporting cash commitments similar to last year, which were its highest upfront commitments to date. The company reportedly secured $7 billion in upfront commitments for 2022.
Revenue for the film studios business decreased by about 1% to $3.09 billion compared to the same period last year, despite the success of movies like “The Super Mario Bros. Movie” and “Fast X.”
The theme parks segment of NBCUniversal continued to perform well, with revenue increasing by 22% to $2.21 billion for the period. This growth was driven by the opening of Super Nintendo World at Universal’s Hollywood park and expansion in Beijing and Japan. However, Orlando operations posted lower revenue, possibly due to a slowdown in traffic and ticket price increases at Disney’s Orlando theme parks.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.