Comcast (CMCSA) Q1 2023 outcomes

Komcast topped analysts’ expectations with its first-quarter earnings report on Thursday, despite the cable and media giant’s slowing growth in consumer broadband and mounting Peacock losses.

The company’s shares are up more than 3% in premarket trading. The stock is up more than 4% this year through the close on Wednesday.

Here’s how Comcast performed versus estimates from analysts polled by Refinitiv:

  • earnings per share: 92 cents adjusted versus 82 cents expected
  • revenue: $29.69 billion versus $29.3 billion expected

For the quarter ended March 31, Comcast reported earnings of $3.83 billion, or 91 cents a share, compared to $3.55 billion, or 78 cents a share, a year ago. Adjusted for one-time items, Comcast reported earnings per share of 92 cents for the most recent period.

Revenue fell 4% to $29.69 billion from $31.01 billion in the year-ago period, with the company noting that it broadcast both last year’s Super Bowl and Beijing Olympics in the first quarter .

The Philadelphia-based company said its adjusted earnings before interest, taxes, depreciation and amortization rose 3% in the first quarter to $9.42 billion in the first quarter.

Comcast said it returned $3.2 billion to shareholders during the quarter through a mix of $1.2 billion in dividend payments and $2 billion in share repurchases.

Comcast lost 21,000 residential broadband customers during the quarter, but got a slight boost from its business customers. Company executives warned earlier this year that Comcast was likely to lose broadband subscribers in the first quarter.

Still, it was a sign that Comcast, like its peers, continues to face slowing growth in its broadband business. Executives have said that while the rate of customer loss is very low, growth — especially since the early days of the pandemic — has stalled as they face increased competition from telecom and wireless carriers.

Xfinity’s wireless business grew to nearly 5.67 million customers in the quarter, a sign that its wireless service — provided in conjunction with an agreement to use Verizon’s network — remains a bright spot.

Cable TV subscribers continued their exodus from the traditional bundle, with Comcast losing 614,000 subscribers during the quarter.

Last month, Comcast announced that it was changing the reporting of its segments, now merging its Xfinity-branded broadband, cable and wireless services with its UK company Sky, which includes Sky-branded pay-TV services and entertainment television channels to form the Connectivity and Platforms segment. Total segment revenue was approximately $20.15 billion, down slightly from last quarter due to the impact of foreign currencies.

The second segment, Content and Experiences, includes all of NBCUniversal’s television and streaming businesses, its international networks and Sky Sports channels, as well as its film studios and theme parks. Total segment revenue fell nearly 10% to $10.26 billion in the quarter.

Media business revenue declined in the first quarter, with revenue down nearly 40% to $6.15 billion due to last year’s comparison when NBC aired the Super Bowl and rights to the Olympics in Beijing for its television stations and Peacock. However, Comcast said that excluding the $1.5 billion incremental revenue from those two major sporting events, media revenues were still down about 2%.

The tightening advertising market showed up on Comcast’s balance sheet this quarter, as did its peers Paramount Global and Warner Bros. Discovery. Excluding the Olympics and Super Bowl — two events that generate a lot of advertising revenue — domestic advertising declined about 6% in the quarter due to lower TV station revenue and declining audience ratings.

Earlier this week, NBCUniversal faced the ousting of CEO Jeff Shell over a sexual harassment and discrimination complaint filed by an employee.

Revenue from domestic television distribution increased, except for the Olympics, which Comcast said was primarily due to higher revenue at Peacock, which had more paying subscribers.

According to Comcast, Peacock subscribers grew more than 60% year over year to 22 million and revenue rose 45% to $685 million. Peacock had losses of $704 million, up from losses of $456 million in the same period last year.

Last quarter, the company noted that Peacock’s losses would be about $3 billion this year. Streaming service costs continued to weigh on Media segment earnings.

NBCUniversal’s film segment was boosted during the quarter by the animated “Shrek” spinoff Puss in Boots and the horror film “M3GAN,” with revenue increasing nearly 2% to $2.96 billion rose.

CEO Brian Roberts praised NBCUniversal’s movie listings in Thursday’s earnings call with the success of “The Super Mario Bros. Movie,” which released earlier this month. This week it surpassed $900 million at the global box office, including $444 million domestically.

NBCUniversal’s upcoming film listing includes Fast X, the next installment in the popular Fast and Furious franchise, as well as Christopher Nolan’s next epic Oppenheimer, about the scientist who led the development of the atomic bomb during World War II. It will appear in the July.

The company’s theme park segment continued to grow, especially since parks closed during the height of the pandemic, with revenue up 25% to $1.95 billion. The opening of Super Nintendo World also contributed to the increase in sales.

Disclosure: Comcast owns NBCUniversal, CNBC’s parent company.

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