By Lillian Rizzo
Comcast Corp.'s second-quarter revenue fell 12% from a year
earlier, as the impact of the coronavirus on its NBCUniversal unit
-- which includes theme parks, a movie studio and
advertising-dependent TV networks -- more than offset the cable
giant's continued success in signing up broadband customers.
The Philadelphia-based company said revenue for the quarter
ended June 30 was $23.72 billion, down from $26.86 billion a year
earlier. Net profit was nearly $3 billion, or 65 cents a share,
down about 4% from $3.12 billion, or 68 cents. FactSet analysts
were expecting earnings per share of 55 cents in the latest
Comcast shares were trading at $43.81, essentially flat,
NBCUniversal was hit hard by the coronavirus pandemic. The
unit's 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 its 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.
Comcast's 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. The tally didn't include
more than 600,000 broadband customers that either signed up free or
weren't disconnected due to relief pledges put in place by the
Federal Communications Commission. While such pandemic-related
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 a year earlier. 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.
Earlier this month, NBCUniversal launched Peacock, which has so
far signed up 10 million streaming customers. AT&T said last
week HBO Max's total activations since its May launch topped 4
million. Disney+ said in April it had more than 50 million global
subscribers, five months after its launch.
Comcast cable-TV and internet customers receive Peacock's
premium ad-supported tier free, and make up some of the 10 million
"We are leaning into streaming," Chief Executive Brian Roberts
said during an earnings call Thursday, adding that Peacock has so
far exceeded expectations.
While Comcast said Peacock users have engaged in more streaming
and for longer periods than expected, the company said it was too
early to disclose the number of monthly active accounts or
Unlike its streaming competitors, Peacock is a largely
ad-supported service, and includes a free tier with less content
than its $5-a-month premium tier with commercials.
Comcast Cable, which comprises the company's broadband, pay-TV,
landline and mobile businesses, had about $14.4 billion in revenue,
slightly down from last year's second quarter. 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. Revenue for the European media business fell 16% to about
$4.1 billion, with its advertising revenue dropping 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 put on hold.
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, in what was considered a success.
On Thursday, NBCUniversal President Jeff Shell said he believes
this model will help draw consumers into movie theaters when it is
safe to return to them.
"Movie studios like ours don't want to release movies into
theaters when we only have a smattering of theaters open. We need a
pretty robust amount of theaters open to justify our spending," Mr.
Shell said. "But the flip side is, exhibitors can't open theaters
if they don't have any new movies."
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
July 30, 2020 12:13 ET (16:13 GMT)
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