Comcast Ltd reported fourth-quarter earnings on Thursday that topped analyst expectations despite continued softening in broadband subscriber growth and mounting losses from its streaming service, Peacock.
The company’s top-line growth was fueled by higher revenue from its broadband and wireless businesses as well as its theme park segment.
Here’s how Comcast performed compared to analysts’ estimates surveyed by Refinitiv:
- earnings per share: 82 cents, adjusted, versus 77 cents expected
- Revenue: $30.55 billion vs. $30.32 billion expected.
The Philadelphia company reported Thursday its fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization, which declined nearly 5% to $8 billion compared to the same period last year, notably due to higher severance expenses. reason.
Comcast said it lost a total of 26,000 broadband customers during the period, particularly due to the impact of Hurricane Ian hits Florida and South Carolina in September, which caused severe damage and loss to Comcast customer homes, management said on a call with investors on Thursday. Excluding the effects of the storm, Comcast said it would add 4,000 customers.
Yet that number was a sign that cable broadband subscriber growth has slowed — especially compared to the early days covid pandemic, The slowdown in subscriber growth is hurting the cornerstone business of cable companies like Comcast and charter communication In recent quarters, they have been facing stiff competition from telecom and wireless providers.
The companies have also recently said that the downturn in the US housing market – and the declining rate of moving between households – has contributed to a lack of new customers. Still, Comcast’s broadband customer base remains stable and segment revenue grew nearly 6% during the quarter due to price increases.
Comcast’s Xfinity Mobile continued to grow with 365,000 net additions in the quarter, bringing its total wireless customers to more than 5.3 million. Mobile subscriber growth has been consistent for cable providers since they jumped into the business in recent years.
The cable TV business lost 440,000 subscribers during the quarter as consumers continued to cut down on their traditional TV bundles in favor of streaming services.
peacock pressure
NBCUniversal saw a nearly 6% increase in revenue during the fourth quarter, to nearly $9.9 billion, boosted by revenue from the 2022 FIFA World Cup, which aired on its Spanish-language Telemundo TV network and Peacock .
However, Peacock weighed on NBCUniversal’s business — which is made up of film, TV, streaming and theme parks — as its adjusted earnings fell more than 36% to $817 million, due to Peacock’s loss and higher severance expense. NBCUniversal reported an adjusted loss of $978 million related to Peacock, compared to a loss of $559 million in the same period last year.
Peacock’s losses in 2022 were in line with Comcast’s earlier outlook of $2.5 billion, Comcast President Michael Cavanagh said on a call with investors on Thursday. Cavanagh said the company expects Peacock’s losses to reach about $3 billion in 2023.
Cavanagh said Thursday that the company still expects service losses to peak in 2023 and to steadily improve thereafter.
The company said on Thursday that Peacock added 5 million net paying customers during the fourth quarter, its best quarterly record since its 2020 launch. Peacock passed 20 million paying customers and its revenue nearly tripled to $2.1 billion.
Comcast executives on Thursday attributed the increase in Peacock subscribers to its live sports programming including the World Cup, the NFL and the English Premier League, as well as movies like “Nope” and broadcasts of NBC and Bravo shows the following day.
“It’s very clear that we’ve chosen the right business model,” NBCUniversal CEO Jeff Shell said Thursday. “We made that investment … and made it clear from the beginning that we were going to make a return on that investment. I think we feel better about it now.”
NBCUniversal launched Peacock in 2020 with two options: a $4.99 ad-supported tier and a $9.99 commercial-free tier. In the last year, others like netflix And Disney+ has followed with less expensive, ad-supported alternatives. as the weight of competing forces Subscriber growth for streamers.
The theme park business remained a bright spot for NBCUniversal, with revenue for the segment rising 12% to $2.1 billion during the fourth quarter, driven by higher attendance and customer spending at locations in the US and Japan.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.