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Comcast Exceeds Q4 Expectations with Broadband Revenue Boost
Comcast’s fourth-quarter results, released on Thursday, showcased the company’s ability to surpass Wall Street’s projections, largely supported by gains in its broadband sector, despite facing challenges in customer retention.
Highlights of Comcast’s performance for the quarter ending December 31 are as follows, compared to average analyst estimates from LSEG:
Earnings per share: 96 cents adjusted vs. 86 cents
Revenue: $31.92 billion vs. $31.64 billion
Following the announcement, Comcast shares experienced a slight dip during premarket trading.
For the quarter, net income attributable to Comcast saw a significant increase of approximately 47%, reaching $4.78 billion or $1.24 per share, compared to $3.26 billion or 81 cents per share in the previous year.
After accounting for one-time expenses, including interest and asset valuations, the company reported adjusted earnings per share of 96 cents.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose about 10%, totaling $8.81 billion. The overall revenue also experienced a 2% increase, achieving $31.92 billion, bolstered by performance in various sectors, such as mobile services, the film division, and the streaming platform Peacock. Notably, during the same quarter of 2022, Comcast’s revenue stood at $31.25 billion.
While the broader cable industry has witnessed a downturn in broadband subscriber growth in recent times, Comcast’s financials reflect the importance of this sector, driven by price increases and higher average revenue per user. However, the company reported a loss of 139,000 domestic broadband customers in the fourth quarter—something Comcast Cable CEO Dave Watson had hinted at during a previous investor conference.
The broadband division is part of Comcast’s Connectivity and Platforms segment, which also encompasses Xfinity Mobile. Since its inception in 2017, Xfinity Mobile has achieved over 7.8 million mobile lines, contributing positively to overall residential connectivity revenues.
On the cable TV front, Comcast experienced a decline of 311,000 subscribers during the fourth quarter.
Revenue from Comcast’s Content and Experiences division, which includes NBCUniversal’s television networks, streaming services, film production, and theme parks, grew by 5%, totaling approximately $12.08 billion in the fourth quarter.
The media segment, encompassing TV networks, reported a 3.5% revenue increase to around $7.22 billion, driven primarily by an uptick in paid subscriptions to the streaming service Peacock. While total domestic advertising revenue within this segment remained stable, there was a disparity as Peacock saw increased ad revenue compared to decreasing returns from traditional TV networks.
In a significant corporate strategy shift, Comcast announced plans to spin off its cable network channels, which include prominent brands such as CNBC, MSNBC, E!, Syfy, USA, Oxygen, and the Golf Channel. This separation, which will also affect digital platforms like Fandango and Rotten Tomatoes, is anticipated to take about a year. Comcast intends to retain ownership of the NBC broadcast network, Bravo, and Peacock.
As for Peacock, the service reported maintaining 36 million paid subscribers during the fourth quarter, the same number as in the previous quarter.
The streaming platform has been inching closer to profitability in recent periods, aided by live sports programming. In the fourth quarter, Peacock generated $1.3 billion in revenue with an adjusted EBITDA loss of $372 million, showing significant improvement from the prior year’s $1 billion revenue and adjusted EBITDA loss of $825 million.
Meanwhile, Universal Studios reported a 6.7% revenue increase to $3.27 billion, with adjusted EBITDA soaring 85% to $569 million, spurred by box office hits like “Kung Fu Panda 4,” “Despicable Me 4,” “The Wild Robot,” and “Wicked.”
In contrast, revenue from Theme Parks remained flat, reflecting ongoing challenges with attendance at domestic locations.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. NBCUniversal holds the U.S. broadcast rights for all Summer and Winter Olympic Games through 2032.
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