comcast Third-quarter profits beat expectations on Thursday as the Paris Summer Olympics boosted NBCUniversal’s revenue and Peacock’s subscriber numbers.
Comcast stock rose 6% in early trading Thursday.
Here’s how Comcast performed compared to estimates of analysts surveyed by LSEG:
- Earnings per share: Adjusted $1.12, forecast $1.06
- Revenue: $32.07 billion vs. expected $31.66 billion
Net income for the quarter ended Sept. 30 fell 10% to $3.63 billion, or 94 cents per share, compared with $4.05 billion, or 98 cents per share, in the year-ago period. . Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 2% to approximately $9.74 billion. Adjusted for one-time items, Comcast reported earnings per share of $1.12 for the quarter.
The company’s sales increased 6.5% year-on-year to $32.07 billion. Overall revenue was boosted by NBCUniversal’s exclusive U.S. broadcast of the Paris Summer Olympics and domestic broadband revenue, even as customer growth continued to slow.
Revenue for the media division, which primarily consists of NBCUniversal, increased nearly 37% to $8.23 billion, primarily due to the Olympics. Excluding the summer games, revenue increased by almost 5%.
The media division also includes NBCUniversal’s cable TV networks, including Bravo, Syfy, and CNBC. During a conference call Thursday, Comcast President Mike Kavanaugh announced that the company is considering spinning off its cable network business.
This more than offset the decrease in Media’s adjusted EBITDA due to higher Olympic-related operating expenses and higher programming costs for Peacock and other sports television programs.
The Paris Summer Olympics proved to be a success for NBCUniversal, as it drew an average of 31 million viewers per day across NBC’s television and streaming platforms and generated a record $1.2 billion in ad revenue, according to CNBC previously reported.
This led to a 19.3% increase in overall revenue for the Content and Experiences segment, which also includes theme parks and movie studios, to approximately $12.6 billion. This total includes $1.9 billion in increased revenue from the Paris Olympics.
Peacock also benefited from the Olympics, with all Olympic games exclusively streamed and an increase of 3 million subscribers. The platform’s paid subscribers rose 29% year-on-year to 36 million. Peacock’s revenue increased 82% to $1.5 billion.
NBCUniversal Peacock
Todd Williamson | Peacock | Peacock NBC Universal | Getty Images
Losses attributable to Peacock improved for the segment, with adjusted EBTIDA losses of $436 million in the quarter, compared to $565 million in the year-ago period.
The company’s movie studio, also part of its Content and Experiences division, saw revenue increase 12.3% year-over-year to $2.83 billion. The success of the recently released films “Despicable Me” and “Twisters” has increased theatrical box office revenue.
NBCUniversal’s theme park revenue decreased 5.3% to approximately $2.3 billion due to lower attendance. Theme parks have been weighing on the company recently, as the surge in visitor numbers following the coronavirus lockdown has slowed.
Meanwhile, Comcast’s broadband division, the cornerstone of its business, continued to reflect ongoing industry trends.
Cable broadband customer growth is sluggish across the industry. Comcast executives attributed the decline to a slowdown in home sales. Competition from wireless providers like Verizon and T-Mobile is also increasing.
Things were mixed for Comcast this quarter. The government’s Affordable Connectivity Program (ACP), which offered discounts to eligible low-income households, ended earlier this year.
Total domestic broadband net losses amounted to 87,000, but excluding those attributable to the ACP termination, the company estimates that the number of customers increased by 9,000.
On Thursday’s conference call, CFO Jason Armstrong said the broadband business typically benefits from back-to-school activity in the third quarter, and this year is in line with that trend.
Domestic broadband revenue increased 2.7% year-over-year to $6.54 billion, and average revenue per user, a continued source of growth for the segment, increased 3.6% despite slow additions.
Meanwhile, Comcast’s wireless business added 319,000 customers for a total of about 7.5 million lines. The company lost 365,000 cable TV customers during the quarter.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder for all Summer and Winter Olympics through 2032.
