Comcast exceeded Wall Street’s fourth-quarter estimates despite facing larger-than-expected losses in broadband subscribers and stagnant paid subscribers for its streaming service, Peacock. The focus has been on cable companies’ broadband businesses, which still generate high revenue and earnings but have experienced a slowdown in customer growth due to increased competition from wireless companies and other factors.
Streaming services have also been a key concern for investors. While profitability is now a crucial measure of success, recent subscriber additions by major players have been noted since the introduction of cheaper, ad-supported tiers. Comcast reported a loss of 139,000 residential broadband customers in the fourth quarter, more than the 100,000 losses forecasted by Comcast Cable CEO Dave Watson in December.
Comcast President Mike Cavanagh expressed disappointment over the broadband losses during an investor call. The company reported that Peacock had 36 million subscribers in the most recent quarter, which was flat from the previous period but showed year-over-year growth. However, this fell short of Wall Street’s expectation of 37.56 million paid subscribers.
Comcast’s net income attributable to Comcast rose by approximately 47% to $4.78 billion for the quarter ended Dec. 31. Adjusted earnings per share were reported at 96 cents for the period, with adjusted earnings before interest, taxes, depreciation, and amortization increasing by about 10% to $8.81 billion. Overall revenue for Comcast rose by 2% to $31.92 billion, driven by growth in segments such as mobile business, the film studio, and revenue from Peacock.
Despite a slowdown in cable industry broadband customer growth, Comcast’s broadband business remains a significant revenue driver. The company’s Connectivity and Platforms segment, which includes Xfinity Mobile wireless, has surpassed 7.8 million mobile lines, contributing to overall residential connectivity revenue. Comcast plans to focus more on the mobile business in the coming quarters to boost growth and bundle it with broadband services.
Comcast lost 311,000 cable TV customers in the fourth quarter, while revenue for the Content and Experiences business, including NBCUniversal’s TV networks, streaming, film studio, and theme parks, increased by 5% to approximately $12.08 billion. The media segment’s revenue was up 3.5% to about $7.22 billion, driven by higher revenue from Peacock due to increased paid subscribers.
Comcast announced plans to spin off its cable network channels, including CNBC, MSNBC, E!, Syfy, USA, Oxygen, and the Golf Channel, along with digital assets like Fandango and Rotten Tomatoes. The separation is expected to take about a year, while NBC broadcast network, cable channel Bravo, and Peacock will remain with Comcast.
Peacock has been moving towards profitability, reporting $1.3 billion in fourth-quarter revenue and an adjusted EBITDA loss of $372 million. Universal Studios’ revenue increased by 6.7% to $3.27 billion, with adjusted EBITDA up 85% to $569 million, driven by successful films like “Kung Fu Panda 4,” “Despicable Me 4,” “The Wild Robot,” and “Wicked.” Theme Parks revenue remained flat due to lower attendance at domestic locations.
