Comcast (CMCSA) Outcomes 4Q22
Komcast reported fourth-quarter results on Thursday that beat analysts’ expectations despite continued weakness in broadband subscriber growth and mounting losses from its streaming service Peacock.
The company’s revenue growth was driven by higher revenue from its broadband and wireless businesses, as well as its theme park segment.
Here’s how Comcast performed versus estimates from analysts polled by Refinitiv:
- earnings per share: 82 cents adjusted vs. 77 cents expected
- revenue: $30.55 billion versus $30.32 billion expected.
The Philadelphia-based company reported Thursday that its adjusted earnings before interest, taxes, depreciation and amortization fell nearly 5% to $8 billion in the fourth quarter from the year-ago period, largely due to higher severance costs.
Comcast said it lost a total of 26,000 broadband customers during that period, largely due to the effects of Hurricane Ian, which slammed into Florida and South Carolina in September and caused severe damage and loss to Comcast subscribers, management said in a call Thursday investors with. Excluding the impact of the hurricane, Comcast said it would have added 4,000 customers.
But even that number was a sign that the growth of cable broadband subscribers has slowed – especially compared to the early days of the Covid pandemic. The slowdown in subscriber growth has been the cornerstone business of cable companies like Comcast and Charter Communication in recent quarters as they face increased competition from telecom and wireless carriers.
The companies also recently said that the slowdown in the US housing market — and a declining rate of home churn — has contributed to the lack of new customers. Still, Comcast’s broadband customer base has remained resilient, and the segment’s revenue grew nearly 6% during the quarter, thanks in part to price increases.
Comcast’s Xfinity Mobile continued to grow with 365,000 net adds in the quarter, bringing the total number of wireless subscribers to more than 5.3 million. Mobile subscriber growth has remained constant for cable providers since entering the business in recent years.
The cable TV business lost 440,000 subscribers in the quarter as consumers continue to ditch their traditional TV packages in favor of streaming services.
NBCUniversal reported fourth-quarter revenue growth of about 6% to about $9.9 billion, driven by revenue from the 2022 FIFA World Cup, which aired on its Spanish-language television network Telemundo and Peacock.
However, Peacock hurt NBCUniversal’s business — which consists of film, television, streaming and theme parks — as adjusted earnings fell more than 36% to $817 million on Peacock’s losses and higher severance costs. 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 2022 losses were in line with Comcast’s earlier forecast of $2.5 billion, Comcast President Michael Cavanagh said when speaking to investors Thursday. The company projects Peacock losses of up to $3 billion in 2023, Cavanagh said.
The company still expects the service’s losses to peak in 2023 and steadily improve thereafter, Cavanagh said Thursday.
The company announced Thursday that Peacock added 5 million net paying subscribers in the fourth quarter, its best quarterly record since its inception in 2020. Peacock surpassed 20 million paying subscribers and its revenue has grown to 2.1 billion US dollar almost tripled.
Comcast executives attributed Thursday’s surge in Peacock subscribers to its live sports programming, including the World Cup, the NFL and the English Premiere League, as well as movies like “Nope” and the next-day airing of NBC and Bravo shows.
“It is very clear that we have chosen the right business model,” Jeff Shell, CEO of NBCUniversal, said on Thursday. “We made this investment…and made it clear from the start that we will see a return on this investment. I think we feel better now.”
NBCUniversal launched Peacock in 2020 with two options: an ad-supported tier for $4.99 and an ad-free tier for $9.99. Last year others like Netflix and Disney+ have followed suit with less expensive, ad-supported options as competitive forces weigh on subscriber growth for streamers.
The theme parks business remained a bright spot for NBCUniversal, with fourth-quarter revenue for the segment rising 12% to $2.1 billion, driven by higher attendance and customer spending at locations in the U.S. and Japan.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
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