Comcast exceeded Wall Street’s fourth-quarter estimates despite facing larger-than-expected losses in broadband subscribers and stagnant growth in paid subscribers for its streaming service, Peacock. The focus has been on cable companies’ broadband businesses, which generate high revenue and earnings but have experienced a slowdown in customer growth due to increased competition from wireless providers and other factors.
Investors have been closely monitoring the streaming sector, with profitability now being a key metric for success. Recent subscriber additions by major players, following the introduction of cheaper ad-supported tiers, have garnered attention. Comcast reported a loss of 139,000 residential broadband customers in the fourth quarter, higher than the 100,000 losses forecasted by Comcast Cable CEO Dave Watson in December.
During the same period, Peacock had 36 million subscribers, showing a year-over-year increase but remaining flat from the previous quarter. Comcast shares dropped by 11% following the announcement. The company’s performance for the quarter included a 47% rise in net income to $4.78 billion, with adjusted earnings per share of 96 cents. Adjusted EBITDA increased by about 10% to $8.81 billion.
Comcast’s overall revenue rose by 2% to $31.92 billion, driven by growth in segments such as mobile business, film studio, and Peacock. Despite a slowdown in broadband customer growth, Comcast’s average revenue per user has increased. The company plans to focus on its mobile business to boost growth and bundle it with broadband services. Comcast lost 311,000 cable TV customers in the fourth quarter.
Revenue for the Content and Experiences business, which includes NBCUniversal’s TV networks, film studio, and theme parks, increased by 5% to approximately $12.08 billion. The media segment’s revenue grew by 3.5% to about $7.22 billion, mainly due to higher revenue from Peacock. The media segment’s adjusted EBITDA fell short of expectations, while other businesses in the segment exceeded estimates.
Comcast announced the spin-off of its cable network channels, including CNBC, MSNBC, E!, Syfy, USA, Oxygen, and the Golf Channel. Peacock has been moving towards profitability, reporting $1.3 billion in fourth-quarter revenue. Universal Studios’ revenue increased by 6.7% to $3.27 billion, and Theme Parks revenue remained flat due to lower attendance at domestic locations.
