Comcast today reported adjusted earnings of $1.21 a share for the quarter, beating Wall Street’s call for $1.12, according to FactSet. Revenue of $29.7 billion was slightly below consensus estimates of $30 billion. However, the company reported a loss of 120,000 total domestic broadband customers and 419,000 domestic video subscribers in the 2nd quarter.
“The competitive intensity that we’ve seen for the past several quarters, and which is particularly felt in the market for price-conscious consumers, remains essentially unchanged,” Comcast President Mike Cavanagh said on today’s earnings call.
Seaport Research analyst David Joyce: “Due to continued Broadband subscriber losses (where growth is driven by pricing), an elevated competitive environment for the time being, and the mixed Media topline and profitability trajectories, we remain Neutral,” Joyce wrote. Sentiment will improve when there are signs of stabilization in broadband market share, he added.
Comcast is moving ahead with HFC network upgrades, including “mid-splits” that dedicate more capacity to the upstream. Watson said mid-splits have been completed in about 42% of Comcast’s HFC footprint, a figure he expects to reach 50% by the end of the year. Comcast’s mid-splits are occurring alongside a plan to deploy DOCSIS 4.0 upgrades that are initially delivering symmetrical speeds of up to 2 Gbit/s. Comcast has D4.0-based services available in three markets – Philadelphia, Atlanta and Colorado Springs – with Seattle up next.
Broadband average revenue per unit (ARPU), which was up 3.6% in the quarter, remains a bright spot as customers continue to gravitate to higher speed tiers. Comcast CEO Brian Roberts: “Broadband ARPU increased by 3.6% and we delivered 6% revenue growth in our connectivity businesses, while expanding our Adjusted EBITDA margin across Connectivity & Platforms to a record-high 41.9%.”
“Faster homes passed growth shouldn’t be expected to turn broadband subscribership back into a growth engine, but it is a critical factor in keeping broadband subscriber results stable,” MoffettNathanson analyst Craig Moffett explained in a research note (payment required) issued today.
Comcast also expects to participate in the $42.45 billion Broadband Equity Access and Deployment (BEAD) program.
Comcast’s pay-TV business continued its downward spiral. The company lost 419,000 video subs in Q2, an improvement from a year-ago loss of 543,000. Analysts were expecting Comcast to shed about 502,000 video subs in Q2.
The Peacock streaming service, which broadcasts live sporting events like the upcoming summer Olympics, reported paid subscribers soared 38% from a year ago to 33 million, while revenue rose 28% in the 2nd quarter to $1 billion.
2nd Quarter 2024 Highlights:
• Adjusted EPS Increased 7.0% to $1.21; Generated Free Cash Flow of $1.3 Billion, Including a Tax
Payment Related to the Previously Announced Hulu Transaction and Other Tax Related Matters
• Return of Capital to Shareholders Totaled $3.4 Billion Through a Combination of $1.2 Billion in
Dividend Payments and $2.2 Billion in Share Repurchases
• Connectivity & Platforms Adjusted EBITDA Increased 1.6% to $8.5 Billion and Adjusted EBITDA
Margin Increased 90 Basis Points to 41.9%, Its Highest on Record
• Continued the Successful Execution of Our Domestic Network Expansion and Upgrade Strategy;
Expanded Deployment of Mid-Split Technology to 42% of Our Footprint; And Added 302,000 New
Homes and Businesses Passed in the Second Quarter
• Domestic Broadband Average Rate Per Customer Increased 3.6%, Driving Domestic Broadband
Revenue Growth of 3.0% to $6.6 Billion
• Domestic Wireless Customer Lines Increased 20% Compared to the Prior Year Period to 7.2 Million,
Including Net Additions of 322,000 in the Second Quarter
• Business Services Connectivity Adjusted EBITDA Increased 4.4% to $1.4 Billion and Adjusted
EBITDA Margin Was 57.0%
• Media Adjusted EBITDA Increased 9.0% to $1.4 Billion, Driven by Improved Performance at Peacock
• Peacock Paid Subscribers Increased 38.0% Compared to the Prior Year Period to 33 Million;
Peacock Revenue Increased 28% to $1.0 Billion; Best Year-Over-Year Improvement in Adjusted
EBITDA for Any Quarter Since Launch in 2020.
References:
https://www.cmcsa.com/static-files/68abe434-80f7-437e-8e7a-fa457e43e63b