Comcast’s quarterly number topped Wall Street forecasts with Epic Universe contributing to 19% revenue growth at Theme Parks, advertising steady thanks to Peacock (and excluding a massive year-earlier bump from the Paris Olympics) and good news on the subscriber front with fewer domestic broadband losses and a jump in wireless customers.
Total revenue for the three months ended in September dipped 2.7% to $31.2 billion with adjusted earnings per share flat at $1.12 – both beating analysts’ consensus. The shares are up 2% in pre-market trading on the numbers.
It’s a pivotal moment for the Philadelphia-based media giant as it eyes a run for Warner Bros, Discovery and prepares to spin off its cable networks into a new company, Versant.
It’s in the midst of a major push to recalibrate in its big Connectivity business to turn around broadband amid competitive headwinds. The company opened its new Epic Universe theme park in May and Universal Horror Unleashed opened in Las Vegas in August. It nailed down succession planning, elevating President Mike Cavanagh to co-CEO with Brian Roberts. Â
Universal’s Jurassic World: Rebirth, which has grossed nearly $900 million at the global box office, nudged theatrical revenue higher. Studios profit fell 22% on higher costs associated with content licensing sales and higher marketing and promotion expenses for recent and upcoming theatrical film releases.
Universal just nabbed the prolific hitmaker Taylor Sheridan from Paramount once his contract there expires.
In media, domestic ad revenue plunged 41% with Paris but was up over 2% without. The Paris Games added $1.9 billion of incremental revenue in last year’s quarter. NBC Sports is gearing up for the Milan-Cortina Olympic Winter Games starting in February.
Media profit grew on lower programming costs and Peacock cut its losses in half to $217 million from the year before. Streaming subscribers rose 14% from year-ago to 41 million and were about flat from the previous quarter.
The company lost 104,000 broadband customers, mostly residential (91k), fewer than 226,000 the previous quarter and than Wall Street had anticipated. Comcast has committed to keeping customers happier with new pricing and contract options and bundles and more attentive customer service.
“We’re making steady progress as we reposition the company for long-term, sustained growth,” said Roberts. “In Connectivity, we’re taking deliberate steps to strengthen our broadband foundation and accelerate wireless as a meaningful growth engine, adding a record 414,000 wireless lines this quarter – clear evidence of the value of our converged offerings. In addition, Business Services delivered another solid performance.”
“In Content & Experiences, we’re building momentum across NBC and Peacock as we head into one of the most exciting stretches of live sports in our history, including robust NBA coverage which just began last week,” he said.
Strong theme park numbers” reflect the strength of our newest attractions and the enduring appeal of the Universal brand.”
Comcast execs will host a call at 8:30 am ET and likely field queries about potential M&A with WBD formally in auction mode.
David Ellison’s Paramout has made three bids for the company already and is considered the likely buyer but Comcast has also been circling. Rich Greenfield of Lightshed Partners has been thumping recently about a potential Comcast deal, insisting that it wouldn’t necessarily run into the regulatory wall that many anticipate.
“Comcast has always had Disney envy, and now it has a clear opportunity to create a Disney-like story, with an asset mix that could be even more compelling than Disney. Investors and the press keep telling us all the reasons Comcast and Brian will not bid. Whereas all we think about is how can Comcast not take a shot, even if the risk is that Paramount and Ellison still outbid them by dramatically overpaying. This is a once in a generation opportunity for Brian Roberts and Comcast.”
Roberts made a hostile bid for Disney years ago and lost. Later, he tried to outbid Disney for Fox, also unsuccessfully. Comcast shares are down 21% year to date, 30% over the past year, and effectively flat over the past decade, Greenfield said in a note yesterday.
“Initial excitement around the in-process spinoff of Versant, Comcast’s news and general entertainment cable networks, and the opening of Epic Universe at Universal Studios Orlando has already faded. We believe it’s time for Comcast Chairman and Co-CEO Brian Roberts to make a bold move to change the narrative around Comcast,” he said.
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