Comcast fails to add broadband subscribers for the first time ever as economy slows

NBCUniversal has launched a new Peacock streaming service.

Todd Williamson | peacock | NBC International | Getty Images

Comcast reported second-quarter revenue and earnings that beat analyst estimates, but the cable provider didn’t add broadband customers in a quarter for the first time ever.

Comcast’s high-speed Internet customers in the quarter were flat, falling behind the average analyst estimate of 84,000, according to FactSet. Revenue rose 5.1% to $30.02 billion from the previous year, with help from NBCUniversal’s theme parks and studios. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 10.1% to $9.8 billion.

Comcast shares are down more than 5% in pre-market trading.

Comcast is seeing increased competition for high-speed broadband, its most lucrative product. For more than a decade, the cable industry has dominated the home broadband market, but wireless companies like T-Mobile are now competing by offering 5G home internet products. T-Mobile added 560,000 broadband users in the second quarter, well above the first quarter’s total of 338,000.

Here are the key numbers:

  • Earnings per share: $1.01, adjusted for 92 cents, according to Refinitiv
  • he won: $30.02 billion versus an estimate of $29.68 billion, according to Refinitiv
  • High Speed ​​Internet Clients: 0 for 84,000 net additions, according to the average rating of analysts surveyed by FactSet.

Comcast CEO Brian Roberts, in a statement, described the downturn temporarily because macroeconomic conditions such as rising inflation limit the number of new connections for the company. Broadband revenue increased 6.8% year-over-year to $6.1 billion in the second quarter thanks to higher pricing and an increase in resident customers from the previous year.

“We achieved the highest adjusted EBITDA margin ever even as the unique and evolving macroeconomic environment temporarily pressures the volume of our new client connections,” said Roberts.

Since March 2020, Comcast has added more than 3 million broadband customers.

Video clients drop

Comcast lost 521,000 video customers in the quarter and lost 1 million video subscribers in the first six months of 2022. Consumers are ditching traditional pay-TV subscriptions at accelerating rates in favor of streaming options, such as Netflix, Disney+, HBO Max and NBCUniversal’s Peacock.

Brian Roberts, Chairman and CEO, Comcast

David A Grogan | CNBC

Voice customers fell by 286,000 in the quarter, although the number of wireless subscribers jumped by 317,000. Wireless revenue increased nearly 30% year over year to $722 million. Business services rose 10% to $2.4 billion.

NBC Global

NBCUniversal revenue increased 18.7% in the quarter to $9.4 billion. NBCUniversal’s EBITDA increased 19.5% to $1.9 billion.

Studios revenue increased more than 33% to $3 billion, driven by “Jurassic World: Dominion” which surpassed $900 million in global box office sales.

Universal Entertainment continued to recover from last year’s pandemic slowdown. Revenue jumped about 65% to $1.8 billion. Adjusted EBITDA increased 187% to $632 million, the highest EBITDA ratio ever for the second quarter.

Peacock’s paid subscribers remained flat at 13 million after a gain of 4 million in the last quarter. Comcast said it expects “Jurassic World: Dominion” along with two movies released in theaters in the third quarter — “Minions: The Rise of Gru” and Jordan Peele’s “Nope” — to help boost Peacock’s subscribers when they come to the streaming service. After their box office windows expire. Comcast said Sunday Night Football and the World Cup, which begins on November 21, will also add to Peacock’s total subscriber count later this year.

Here’s how Comcast divisions performed for the quarter compared to the previous year:

  • Cable Communications contributed $16.6 billion in revenue, up 3.7% year over year
  • Media revenue of $5.3 billion, up 3.6%
  • The studios contributed $3 billion in revenue, up 33.3%.
  • Theme parks brought in $1.8 billion in revenue, up 64.8%
  • Sky contributed $4.5 billion in revenue, down 13.8%

Disclosure: Comcast is the parent company of NBCUniversal, which includes CNBC.

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