Comcast (CMCSA) posted its biggest earnings beat in two years on Thursday, as a surge in revenue from streaming, theme parks, and the box office offset weakness in the company’s broadband and legacy cable offerings.
Key Takeaways
- Net income for the second quarter surged 25% from the year-ago quarter to $4.25 billion, with earnings per share (EPS) of $1.13 exceeding projections of 97 cents.
- Subscriptions at Peacock, the company’s streaming platform launched in 2020, nearly doubled to 24 million, with revenue from it surging 85%.
- The Super Mario Bros. Movie became the second-highest grossing animated film of all time, allowing the Comcast studios segment to turn a profit.
- The company lost broadband subscribers as competition increased, while its legacy cable networks continued to hemorrhage customers.
Net income surged 25% for the second quarter from the year-ago period to $4.25 billion. Earnings per share (EPS) of $1.13 exceeded projections of 97 cents, and was 34% higher than the same quarter last year. Revenue was up 1.7% to $30.5 billion.
Peacock Subscriptions Nearly Double
Subscriptions at Peacock, the company’s streaming platform launched in 2020, nearly doubled to 24 million, with revenue soaring 85% to $820 million.
The company also benefited from strong revenue at the box office with the Super Mario Bros. Movie, which became the second-highest grossing animated film of all time. Its success enabled the company’s studios segment to turn a $255 million profit, swinging from a $3 million loss in the same quarter last year.
Adjusted EBITDA from the company’s theme parks rose 32% to $833 million, its highest on record, reflecting greater attendance at Universal Beijing, Universal Japan, and Universal Hollywood.
Broadband Stagnates as Cable Sheds More Customers
At the same time, Comcast reported weakness in its broadband internet segment, shedding 19,000 subscribers. This was attributed to increased competition from telecom and wireless providers, as well as fewer Americans moving, which lowered the need for maintenance and upgrades.
However, subscriber losses were offset by higher prices, with EBITDA from the Connectivity and Platforms segment up 4% from a year ago.
Meanwhile, the company’s legacy television networks continued to bleed customers, losing 543,000 in the latest quarter. Comcast has shed more than a million customers in the segment so far this year, after a loss of 614,000 in the first quarter. As of June 30, the company’s domestic cable TV subscriptions had dropped below 15 million.
Cable TV has been hemorrhaging subscribers for years, as streaming platforms like Netflix (NFLX) and Hulu draw millions of customers away from legacy television. U.S. cable and satellite providers collectively shed 2.3 million subscribers in the first quarter alone, helping drive the national pay-TV penetration rate to just 58.5%—its lowest since 1992, according to Variety magazine. Some of the steepest losses occurred at AT&T’s (T) DirectTV and Dish Network (DISH), which had 13.4% fewer customers compared with the same quarter last year.
Shares of Comcast gained 7% at the start of trading Thursday. They’re up more than 25% so far this year.