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Comcast’s Q1 Results Highlight Challenges and Opportunities
Comcast reported its first-quarter results on Thursday, managing to surpass market expectations despite facing challenges in its broadband sector amidst intensified competition.
In the U.S., broadband revenue increased by 1.7% to reach $6.56 billion, yet the company experienced a loss of 199,000 domestic broadband customers. This decline underscores the ongoing difficulties Comcast faces in its core business due to the emergence of alternative internet solutions, such as 5G and fixed wireless options.
Stock for Comcast saw a decline of approximately 3% in premarket trading.
On a brighter note, Comcast’s mobile division, which is less than a decade old, demonstrated robust performance during this quarter. The revenue from this segment rose approximately 16% to $1.12 billion, and the company added 323,000 new lines, bringing the total Xfinity Mobile lines to about 8.15 million. In response to continuing broadband losses, Comcast executives indicated in the previous earnings call their intention to prioritize growth in the mobile sector, resulting in revised mobile plans and pricing, alongside a new leadership appointment.
During the same period, Comcast reported a loss of 427,000 cable TV customers, continuing the trend of customer attrition within the traditional cable bundle. The company operates its broadband, mobile, and pay-TV services under the Xfinity brand.
Examining Comcast’s performance for the quarter ending March 31, results compared favorably against analyst estimates from LSEG:
Earnings per share: $1.09 adjusted vs. 98 cents expected
Revenue: $29.89 billion vs. $29.77 billion expected
For the quarter, Comcast’s net income declined by 12.5%, landing at $3.38 billion or 89 cents per share, down from $3.86 billion or 97 cents per share a year ago. After accounting for one-off items, including taxes and asset-related costs, the earnings per share adjusted to $1.09.
Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by nearly 2% to $9.53 billion, while total revenue decreased slightly to $29.89 billion compared to $30.06 billion during the same quarter in 2024.
Comcast’s revenue benefited from its “growth businesses,” which encompass mobile services, the streaming platform Peacock, its business services division, residential broadband offerings, studios, and theme parks. The company is presently in the process of spinning off its cable network assets, such as CNBC, with the transaction anticipated to close this year.
In the media segment, which includes NBCUniversal, revenue rose by about 1% to $6.44 billion, with the film studios unit seeing a 3% increase to $2.83 billion. Peacock played a significant role in this growth, contributing to a 21% rise in adjusted EBITDA for the media unit, which reached $1 billion. The streaming platform itself recorded a revenue increase of 16%, and the quarterly loss narrowed to $215 million from $639 million in the same period the previous year.
Peacock now boasts 41 million paid subscribers, exceeding the analyst forecasts of 37.21 million for the quarter, and marking an increase from 36 million at the end of the last fiscal year.
In contrast, competitors such as Disney and Warner Bros. Discovery have achieved profitability with their streaming platforms in recent months. The streaming landscape has shifted towards ad-supported models and stricter measures against password sharing in an effort to enhance profitability, reflecting a broader trend where investors prioritize financial performance over subscriber growth.
Meanwhile, revenue from NBCUniversal’s theme parks dipped 5% to approximately $1.88 billion, largely due to reduced visitor numbers during a quarter affected by wildfires in Los Angeles.
The company is preparing for the launch of Universal’s Epic Universe on May 22, which represents the first major theme park development in Florida in 25 years. Comcast describes this new park as its “most ambitious parks experience ever created,” featuring over 50 attractions. Additionally, the company is set to unveil Universal Horror Unleashed in Las Vegas this coming August and has announced plans for a Universal Theme Park and Resort in the U.K.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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