Comcast earnings top analyst estimates despite broadband customer losses

Comcast bushed Wall Street estimates connected Thursday for second-quarter net and revenue. Yet the institution saw a nonaccomplishment of broadband customers adjacent arsenic it shifted its marketplace strategy for the segment.

Comcast and its cablegram peers person been suffering from a slowdown successful broadband growth, which has impacted institution stocks.

Still, Comcast banal was up astir 3% successful aboriginal trading arsenic the institution reported fewer-than-expected broadband subscriber losses, based connected StreetAccount estimates. On an net league call, Comcast executives mapped retired initiatives that were introduced earlier this twelvemonth meant to thrust the broadband business.

"While it's inactive aboriginal days, we similar what we are seeing successful our broadband business. It's giving america assurance successful the alteration that we've made and what's inactive ahead," said Mike Cavanagh, Comcast president. 

Here's however Comcast did successful its 2nd 4th compared with Wall Street estimates, according to LSEG:

• Earnings per share: $1.25 adjusted vs. $1.18 expected
• Revenue: $30.31 cardinal vs. $29.81 cardinal expected

Revenue for Comcast's connectivity and platforms business, which includes the Xfinity-branded broadband, mobile, wage TV and different services, totaled $20.39 billion, up astir 1% from the aforesaid play past year. 

The institution mislaid 226,000 full broadband customers during the 4th – the bulk of which came from its residential customers. Comcast recently pivoted its broadband strategy – including caller pricing plans – to code the continued manufacture woes and heightened contention from alternate providers similar 5G, oregon alleged fixed wireless.

Wall Street had expected losses of astir 257,000, according to StreetAccount.

Last week, cablegram adjacent Charter Communications, the 2nd largest broadband supplier successful the U.S. down Comcast, reported worse-than-expected lawsuit losses sending its banal down 18%, its worst time ever.

"The competitory situation remains intense, arsenic we had previewed," said Comcast CFO Jason Armstrong during Thursday's telephone with investors. However, helium added that the institution has been "encouraged by the aboriginal absorption to our caller go-to-market initiatives."

In summation to switching up its pricing strategy, Cavanagh said Thursday the institution "simplified" its broadband velocity tier offering. It besides began offering a escaped mobile enactment for 1 twelvemonth to each caller and existing customers.

Comcast and Charter person been leaning connected their mobile businesses for growth.

Comcast said it added a grounds 378,000 mobile customers during the 2nd quarter, bringing its full lines to 8.5 million, oregon 14% penetration of its broadband customers.

The nonaccomplishment of wage TV customers continued for Comcast, with 325,000 dropping the bundle during the quarter.

Comcast's wide gross of $30.31 cardinal was a 2% summation twelvemonth implicit year. 

For the 2nd quarter, the company's nett income took a leap owed to the sale of its involvement successful streaming work Hulu to Disney. As a result, nett income was $11.12 billion, oregon $2.98 a share, compared with $3.93 billion, oregon $1 a share, successful the aforesaid play past year. Adjusting for one-time items, including that Hulu sale, Comcast reported net of $1.25 per share. 

Adjusted net earlier interest, taxes, depreciation and amortization, oregon EBITDA, were up 1% to $10.28 billion. 

The company's contented and experiences concern – which includes NBCUniversal, its movie studios and taxable parks – saw gross emergence 5.6% to $10.63 billion.

In peculiar gross for the movie studios was up 8% to $2.43 cardinal – lifted by the merchandise of "How to Train Your Dragon," which debuted successful June and has taken successful much than $600 cardinal astatine the planetary container bureau truthful far.

Universal taxable parks gross was up 19% to $2.35 billion, pursuing the opening of Epic Universe.

"We're pleased with the aboriginal results arsenic Epic is already driving higher per headdress spending and attendance crossed the entirety of Universal Orlando Resort," Cavanagh said, noting there's been minimal interaction connected different Universal parks successful Orlando.

The media business, oregon NBCUniversal, reported gross of $6.44 billion, up astir 2% from the aforesaid play past year.

Domestic advertizing gross was down 7% to $1.85 cardinal arsenic the manufacture continues to endure from a anemic advertisement marketplace for the wage TV business. Despite this, NBCUniversal announced a record Upfront this year arsenic advertisers gravitated toward its upcoming slate of unrecorded sports programming.

NBCUniversal's streaming platform, Peacock, saw subscribers enactment level from the archetypal 4th astatine 41 million. Revenue for Peacock grew 18% to $1.2 cardinal – helping to offset the home advertizing diminution for the media segment. 

Cavanagh said Thursday Peacock represents "over a 3rd of NBCUniversal's full value."

Peacock reported losses of $101 cardinal for the quarter, an betterment from losses of $348 cardinal during the aforesaid play past year. NBCUniversal has been moving to marque its streaming level profitable. Other services person already reported being successful the black. 

In July, NBCUniversal announced a $3 terms summation for Peacock, akin to different streaming services that person raised prices to thrust gross and profitability.

The institution is besides astir to instrumentality connected higher sports programming expenses successful the 4th fourth erstwhile it begins its contract to aerial NBA games.

"It's a large investment," said Cavanagh of the NBA deal. "In this archetypal play we volition instrumentality a afloat year's worthy of outgo amortization related to the business."

Media companies person been shelling retired ample sums for the rights to unrecorded sports arsenic the class continues to nab the astir viewers connected some accepted TV and streaming. NBCUniversal volition pay $2.45 cardinal annually implicit an 11-year woody to aerial NBA games.

"NBC is acceptable up to beryllium good positioned for growth," Cavanagh said, noting the NBA woody arsenic good arsenic the caller determination to spin disconnected its portfolio of cablegram networks, including CNBC. That transaction is expected to beryllium completed aboriginal this year.

Disclosure: Comcast is the genitor institution of CNBC.