Earnings Results: Comcast sees continued growth for cable business as earnings top expectations

United States

Shares of Comcast Corp. were up 4% in afternoon trading Thursday after the media giant posted better-than-expected earnings and revenue.

The company posted net income of $ 3.3 billion, or 71 cents a share, up from $ 2.1 billion, or 46 cents a share, in the year-earlier period. On an adjusted basis, the company earned 76 cents a share, up from 71 cents a year prior and ahead of the FactSet consensus, which called for 59 cents.

Comcast’s CMCSA, +4.14% revenue for the quarter rose to $ 27.2 billion from $ 26.6 billion, while analysts had been expecting $ 26.7 billion.

The company generated $ 15.8 billion in cable revenue, up from $ 14.9 billion a year prior. Comcast saw total customer relationships for the cable business grow by 380,000, which marked the company’s best first-quarter performance on record for that metric.

While still a small portion of the overall cable business, Comcast’s wireless revenue increased 50% in the quarter to $ 513 billion. The company had 3.1 million total wireless lines in the period, up from 2.3 million a year earlier.

Revenue for the NBCUniversal business fell to $ 7.0 billion from $ 7.7 billion, with the media segment posting 3.2% growth, while the studios segment saw revenue decline by 0.6% and the theme parks segment saw revenue drop 33%. The company also disclosed $ 1.0 billion in revenue eliminations for the period, compared with $ 492 million a year earlier, with the changes “primarily driven by the licensing of content by the Studios segment to Peacock in the Media segment.”

The company disclosed that its Peacock streaming service has reached 42 million sign-ups to date, up from the 33 million sign-ups that the company had when it last posted earnings on Jan. 28.

Comcast Chief Executive Brian Roberts noted on the company’s earnings call that Peacock monthly users consumer nearly 20% more programming hours each month than the company’s traditional NBC audience does, and that Comcast’s “strength in users and engagement has enabled us to create additional advertising inventory outside of our initial partnership” with ad prices “at a material premium to linear prime time.”

Comcast’s pay-TV business Sky increased revenue to $ 5.0 billion from $ 4.5 billion, marking a 10.6% increase. Excluding currency impacts, Sky’s revenue would have risen 2%, the company said in its release, “reflecting higher direct-to-consumer revenue, advertising revenue and content revenue.”

Sky added 221,000 customer relationships in the quarter, making for “the best first-quarter result in six years despite the lockdowns imposed throughout Europe,” Roberts said in the release.

Wells Fargo analyst Steven Cahall wrote that there was “very little to criticize” in Comcast’s report, with net additions, revenue, adjusted earnings, and cash all exceeding his expectations.

“Our key questions remain on the foundations of NBCU including the ability of Peacock to move media forward into the great [direct-to-consumer] land beyond,” he wrote. “But, for now we acknowledge very strong cable execution and cyclical recovery that appears ahead of expectations.”