CMCSA Comcast Corporation

By Lillian Rizzo 

Comcast Corp.'s second-quarter revenue fell 12% from a year earlier, as the impact of the coronavirus on its NBCUniversal unit -- which includes theme parks, a movie studio and advertising-dependent TV networks -- more than offset the cable giant's continued success in signing up broadband customers.

The Philadelphia-based company said revenue for the quarter ended June 30 was $23.72 billion, down from $26.86 billion a year earlier. Net profit was nearly $3 billion, or 65 cents a share, down about 4% from $3.12 billion, or 68 cents. FactSet analysts were expecting earnings per share of 55 cents in the latest period..

Comcast shares were trading at $43.81, essentially flat, Thursday morning.

NBCUniversal was hit hard by the coronavirus pandemic. The unit's revenue fell 25% to $6.1 billion due to the closure of theme parks, halted theatrical releases and a sharp decline in advertising. The theme-park business suffered a 94% drop in revenue. While its Orlando and Japan theme parks have been open since June, the Hollywood location has yet to reopen. Advertising revenue at NBCU's cable networks and broadcast-television units fell by 27% and 28%, respectively.

Comcast's broadband business, on the other hand, had its best second quarter on record with 323,000 new subscribers, a 54% increase from last year's second quarter. The tally didn't include more than 600,000 broadband customers that either signed up free or weren't disconnected due to relief pledges put in place by the Federal Communications Commission. While such pandemic-related pledges were discontinued July 1, Comcast has said it doesn't plan to disconnect customers without working with them first.

The company continued to lose cable-TV customers, with 477,000 people cutting the cord in the second quarter, compared with 224,000 a year earlier. This marked the 13th consecutive quarter of pay-TV customer losses.

Pay-TV customers of Comcast and its peers continue to migrate to streaming services such as Netflix Inc. and Walt Disney Co.'s Disney+. Last week, AT&T Inc. said its DirecTV satellite business lost 886,000 U.S. premium-TV subscribers, and another 68,000 online-only channel bundles.

Earlier this month, NBCUniversal launched Peacock, which has so far signed up 10 million streaming customers. AT&T said last week HBO Max's total activations since its May launch topped 4 million. Disney+ said in April it had more than 50 million global subscribers, five months after its launch.

Comcast cable-TV and internet customers receive Peacock's premium ad-supported tier free, and make up some of the 10 million number.

"We are leaning into streaming," Chief Executive Brian Roberts said during an earnings call Thursday, adding that Peacock has so far exceeded expectations.

While Comcast said Peacock users have engaged in more streaming and for longer periods than expected, the company said it was too early to disclose the number of monthly active accounts or users.

Unlike its streaming competitors, Peacock is a largely ad-supported service, and includes a free tier with less content than its $5-a-month premium tier with commercials.

Comcast Cable, which comprises the company's broadband, pay-TV, landline and mobile businesses, had about $14.4 billion in revenue, slightly down from last year's second quarter. Revenue was affected by adjustments made for customer regional-sports-network fees, as Comcast has said it would pass down any rebates to its customers.

Comcast's newest business, Sky, which was acquired in 2018, also suffered. Revenue for the European media business fell 16% to about $4.1 billion, with its advertising revenue dropping 43%.

The company said Sky was able to keep nearly all of its sports-package customers, who weren't charged during the months that European soccer and other sports were put on hold.

On Tuesday, AMC Entertainment Holdings Inc. and Comcast's Universal Pictures reached a deal that would allow movies to play in theaters for much less time before moving to home video.

The agreement came after a public spat between the two companies on how soon movies should be released to digital platforms for home viewing. In April, Universal made "Trolls World Tour" available as a $20 online rental, in what was considered a success.

On Thursday, NBCUniversal President Jeff Shell said he believes this model will help draw consumers into movie theaters when it is safe to return to them.

"Movie studios like ours don't want to release movies into theaters when we only have a smattering of theaters open. We need a pretty robust amount of theaters open to justify our spending," Mr. Shell said. "But the flip side is, exhibitors can't open theaters if they don't have any new movies."

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com

(END) Dow Jones Newswires

July 30, 2020 12:13 ET (16:13 GMT)

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