Comcast beats estimates on broadband, theme park strength

By Helen Coster and Eva Mathews

(Reuters) -Comcast Corp on Thursday said it beat quarterly profit forecasts on sustained demand for its broadband services and rising theme park attendance, giving the media giant a lift days after it fired NBCUniversal’s chief for sexual harassment.

The company’s shares rose 4% as the report showed a smaller-than-expected 4.3% drop in total revenue to $29.69 billion in the first quarter. Analysts had estimated $29.30 billion, according to Refinitiv data.

Comcast (NASDAQ:) said on Monday that NBCUniversal’s chief executive, Jeff Shell (LON:), had been fired for sexual harassment after an investigation found evidence that corroborated a female employee’s complaint.

Shell, a two-decade Comcast veteran who took over the top role in 2020, oversaw businesses including the Universal film studio, Peacock streaming service and Universal’s theme parks.

Comcast President Mike Cavanagh is now running NBCUniversal while also remaining president. When asked by an analyst Thursday if taking on leadership of NBCUniversal was a permanent solution, Cavanagh put no timetable on the move, adding: “Think of me as being there for a while.”

In its first earnings under a new reporting structure that includes NBCUniversal in the content and experiences segment, the company reported a 9.5% fall in revenue in the unit to $10.26 billion in the first quarter.

In the same quarter last year, the business had gained from the Olympics broadcast.

Meanwhile, advertising revenue still remains pressured as elevated inflation levels continue to weigh on the market. Ad revenue in content and experiences fell 38.8%.

Revenue at Peacock rose over 45% compared with a year earlier. Paid subscribers increased by about 2 million in the first quarter from the fourth quarter.

However, adjusted losses from the ad-reliant platform widened to $704 million from $456 million a year earlier as Comcast continues to invest heavily in content.

Theme parks revenue climbed nearly 25%, thanks to a rebound in attendance at its parks overseas and the lifting of COVID-19 curbs in China.

Comcast’s connectivity and platforms revenue, which includes the cable business and most of its Sky unit, reported a marginal loss in revenue, partly due to sustained cord-cutting that was offset by strong demand from large enterprises.

Comcast gained 5,000 broadband customers in the March quarter, while Factset had estimated a loss of 20,000 users.

The company’s chief financial officer said Thursday it will be difficult to gain broadband subscribers in 2023, especially among lower-income consumers, due to the competitive environment.

Competition from wireless carriers such as T-Mobile US (NASDAQ:) Inc and Verizon Communications Inc (NYSE:), which offer 5G home-internet service that users can choose instead of broadband connections, has pressured Comcast’s business.

Overall, net income attributable to Comcast rose 8% to $3.83 billion in the quarter.

Excluding items, the company earned 92 cents per share, above the average expectations of 82 cents.