Coronavirus-Related Drop in Advertising Weighs on Comcast's Revenue
By Lillian Rizzo
Comcast Corp.'s second-quarter revenue fell 12% from a year
earlier, as the impact of the coronavirus on its
advertising-dependent businesses more than offset the cable giant's
continued success in signing up more broadband customers.
The Philadelphia-based company said revenue for the quarter
ended June 30 was about $23.72 billion, down from $26.86 billion in
the year-earlier period. Net profit was nearly $3 billion, or 65
cents per share, down about 4% from $3.12 billion, or 68 cents, a
year earlier. FactSet analysts were expecting earnings per share of
Comcast's NBCUniversal unit was hit particularly hard by the
coronavirus pandemic. Revenue fell 25% to $6.1 billion due to the
closure of theme parks, halted theatrical releases and a sharp
decline in advertising. The theme-park business suffered a 94% drop
in revenue. While the Orlando and Japan theme parks have been open
since June, the Hollywood location has yet to reopen. Advertising
revenue at NBCU's cable networks and broadcast-television units
fell by 27% and 28%, respectively.
Its broadband business, on the other hand, had its best second
quarter on record with 323,000 new subscribers, a 54% increase from
last year's second quarter. This didn't include more than 600,000
broadband customers that either signed up for free or weren't
disconnected due to relief pledges put in place by the Federal
Communications Commission. While such pledges were discontinued
July 1, Comcast has said it doesn't plan to disconnect customers
without working with them first.
The company continued to lose cable-TV customers, with 477,000
people cutting the cord in the second quarter, compared with
224,000 last year. This marked the 13th consecutive quarter of
pay-TV customer losses.
Pay-TV customers of Comcast and its peers continue to migrate to
streaming services such as Netflix Inc. and Walt Disney Co.'s
Disney+. Last week, AT&T Inc. said its DirecTV satellite
business lost 886,000 U.S. premium-TV subscribers, and another
68,000 online-only channel bundles.
Comcast Cable, which comprises its broadband, pay-TV, landline
and mobile businesses, had about $14.4 billion in revenue, slightly
down from the same period last year. Revenue was affected by
adjustments made for customer regional-sports-network fees, as
Comcast has said it would pass down any rebates to its
Comcast's newest business, Sky, which was acquired in 2018, also
suffered in Europe. The unit's revenue fell 16% to about $4.1
billion, and its advertising revenue in particular dropped 43%.
The company said Sky was able to keep nearly all of its
sports-package customers, who weren't charged during the months
that European soccer and other sports were paused.
On Tuesday, AMC Entertainment Holdings Inc. and Comcast's
Universal Pictures reached a deal that would allow movies to play
in theaters for much less time before moving to home video.
The agreement came after a public spat between the two companies
on how soon movies should be released to digital platforms for home
viewing. In April, Universal made "Trolls World Tour" available as
a $20 online rental, which was considered a success.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
July 30, 2020 07:16 ET (11:16 GMT)
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