Comcast shares drop on lost customers, even as results top expectations

Comcast Corp. slid the most in more than a year after reporting higher-than-expected losses in broadband and cable subscribers for the third quarter. Cord-cutting and increasing competition have eroded Comcast’s traditional customer base. The company, which owns Xfinity, the NBCUniversal media empire and SkyTV, lost 490,000 cable TV customers in the quarter, an ongoing trend as consumers switch to streaming services like Netflix. It also lost 18,000 broadband subscribers in the quarter, though its revenue per customer climbed in part because of price increases and promotion of higher-rate plans. Shares fell as much as 8% Thursday, their biggest intraday decline since July 2022. Ad Age World’s Largest Advertisers 2023 Ad spending, rankings and analysis for the top 100 advertisers Click here “Growth has halted for Comcast — the largest US broadband provider, with 32 million homes,” said Bloomberg Intelligence senior media analyst Geetha Ranganathan. “The company derives 80% of profit from cable, where, even after a pandemic-demand surge, broadband has been hurt by fierce competition and low-move activity among customers.” Comcast expects “somewhat higher subscriber losses” in the fourth quarter due to pullback on promotional offers that targeted lower-end customers, Chief Financial Officer Jason Armstrong said on a call with investors. Broadband is becoming increasingly competitive as mobile providers move into the market with improved wireless internet offerings. In the past week, the Big Three—T-Mobile US Inc., AT&T Inc. and Verizon Communications Inc.—all reported subscriber gains. Comcast offers wireless mobile through the Xfinity brand as part of a package for internet subscribers. It added 294,000 mobile phone customers, fewer than the 328,100 analysts predicted. Like broadband losses, the number may reflect stiff competition from other providers. Recent news: Xfinity reveals Nascar selfie paint scheme The company, led by Chairman Brian Roberts, is seeking growth beyond its legacy cable operations. Executives are emphasizing other businesses, including the Universal theme parks and film studio, and the Peacock streaming service. Philadelphia-based Comcast beat profit estimates in part because of subscription pricing and gains in its theme parks. It reported earnings of $1.08 a share, excluding some costs, up 13% from the prior year and above the 95 cents analysts predicted. Revenue rose to $30.1 billion, also exceeding forecasts of $29.7 billion. Peacock added 4 million paying subscribers in the quarter for a total of 28 million, nearly doubling from the prior year thanks in part to the appearance of “The Super Mario Bros. Movie” on the service. Although the business lost $565 million in the quarter, that was better than analysts expected. The company also pared losses in the streaming service, expecting an annual loss of $2.8 billion, down from the $3 billion it previously predicted. Revenue at the film studio dropped almost 24%, to $2.52 billion despite box office success for the movie “Oppenheimer,” which opened in July. The critically acclaimed film grossed more than $954 million in worldwide box office, making it the year’s third-highest-grossing film. The year-to-year comparison suffered because last year’s third quarter included results of “Jurassic World” and “Minions” sequels. Theme park revenue climbed 17% to $2.4 billion. Comcast operates Universal theme parks in Orlando, Florida, and Los Angeles, as well as in Osaka and Beijing. —Bloomberg News Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here

Comcast shares drop on lost customers, even as results top expectations

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