By Lillian Rizzo
The coronavirus pandemic continued to affect the performance of
Comcast Corp., a cable and entertainment conglomerate that suffered
from limited capacity at theme parks and movie theaters but signed
up a record number of broadband subscribers in the latest
quarter.
The Philadelphia-based company, owner of Xfinity-branded
services, the NBCUniversal media empire and the Sky television
business, said third-quarter net profit fell 37% to $2.02 billion,
or 44 cents a share, from $3.22 billion, or 70 cents a share, a
year earlier.
Revenue slipped 4.8% to $25.53 billion from $26.83 billion. Both
numbers topped FactSet analysts' estimates of per-share earnings of
43 cents and revenue of $24.74 billion.
Comcast's Universal Studios theme parks have been hit hard by
the pandemic. Its parks in California have been closed since March,
and there is limited capacity at those opened in Florida and Japan,
prompting the company to lay off a large number of employees.
Theme-park revenue fell 81% to $311 million from $1.63 billion a
year earlier.
Comcast executives said the theme-park business is expected to
break even next year, depending on how the pandemic evolves.
"When the world returns and people are sick of being in their
house, I really feel the parks business is going to be a strong
business," NBCUniversal Chief Executive Jeff Shell said on
Thursday's earnings call. "But no one can tell the pace of how
that's going to go, given how things are happening."
Comcast's theme-park struggles were partly offset by its
broadband business, which posted 633,000 subscriber additions, a
record. As more people rely on home broadband during the
coronavirus pandemic for work and school, providers have
experienced a surge in customer growth in recent quarters.
Broadband, the centerpiece of Comcast's business, reported a 10%
increase in revenue to $5.2 billion.
Comcast shares were up 2.4% in midday trading.
The company continued to lose pay-TV customers, with 273,000 net
defections in the latest quarter. The drop was a modest
improvement, compared with the second quarter, Chief Financial
Officer Mike Cavanagh said Thursday. Just like its peers, Comcast
continues to shed pay-TV customers who are opting for streaming
services. Last week AT&T Inc. reported its pay-TV division lost
627,000 customers.
Overall, Comcast's cable unit -- which also includes a phone
business -- posted a 2.9% increase in revenue to $15 billion.
CEO Brian Roberts said Thursday that Comcast's place in
entertainment, whether in a traditional pay-TV bundle or through
streaming, "remains an important consideration for new and existing
customers."
The NBCUniversal division, whose businesses include cable
networks, the NBC broadcast-TV unit, the Universal Pictures movie
studio and the Universal Studios theme parks, saw overall revenue
fall by 19% to $6.72 billion. Beyond theme parks, the largest
decliner was filmed entertainment, which continued to suffer from
limited capacity in movie theaters because of the pandemic, posting
a 25% revenue decline to $1.28 billion. Only the broadcast unit
posted higher revenue, with a gain of 8.3% to $2.41 billion.
NBCUniversal said Peacock, its new streaming service, landed 22
million sign-ups since its official launch in July. Comcast
broadband and pay-TV customers receive free ad-supported
subscriptions to the premium version of the service. The company
has yet to disclose how many sign-ups are from its current customer
base.
Peacock was also recently added to Roku Inc.'s streaming
platforms after a standoff between the two companies since July.
Peacock remains unavailable on Amazon.com Inc.'s Fire TV
devices.
Peacock's sign-ups so far surpassed internal expectations, the
company said. "We're just seeing the effects of the Roku deal
kicking in, so we have lots of growth coming in amongst Roku
customers," Mr. Shell said. He added the majority of Peacock's
revenue comes from advertising. Comcast doesn't break down
Peacock's profitability or revenue figures.
Mr. Shell said Peacock viewers have been watching Premier League
soccer matches, NBC news, and deep library of content. This week,
it was reported Peacock wouldn't renew one of its first original
series, "Brave New World," for a second season.
NBCUniversal has been going through deep cost-cutting and
restructuring. Some of it is related to the coronavirus pandemic,
but most of it is tied to a realignment of its TV-content-producing
operations to give priority to Peacock.
On Thursday, Mr. Roberts said the priority is investing and
creating content that could be used on any of its platforms --
broadcast, cable network or Peacock -- as well as in third-party
licensing deals.
As a result, several senior executives have left, and a new
leadership team has been put in place over much of its programming
units. Its TV and streaming businesses are led by Mark Lazarus and
Cesar Conde.
Sky, the European business Comcast acquired in 2018, rebounded
as sports returned in Europe. The segment reported $4.79 billion in
revenue, up 5.2% from last year. Comcast has said Sky kept nearly
all of its sports-package customers, who weren't charged during the
months that European soccer and other sports were interrupted.
--Joe Flint contributed to this article.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
October 29, 2020 14:28 ET (18:28 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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