Comcast posted mixed first-quarter results, missing Wall Street expectations for revenue, but beating profit forecasts and warning investors of a “significant” hit to second-quarter results due to COVID-19.
NBCUniversal showed clear signs of the pandemic’s impact, with its first-quarter revenue sliding 7% from a year ago to $7.7 billion, and earnings plunging 25% to $1.7 billion.
For Comcast as a whole, adjusted earnings per share came in at 71 cents, down nearly 7% from the same quarter a year ago but ahead of consensus estimates for 68 cents. Revenue of $26.6 billion slid a fraction from a year ago and also fell short of analysts’ expectation of $26.75 billion.
The coronavirus has boosted some parts of Comcast’s business, with its cable unit seeing a 33% increase in upstream traffic and a 40% increase in WiFi data usage and dramatic leaps in video-on-demand viewing. Those surges have also carried expenses for maintaining the network, however.
In its earnings release, the company said the pandemic will have “a material adverse impact on our consolidated results of operations over the near-to-medium term.”
Results “will be negatively affected in the second quarter by the significant deterioration in domestic economic conditions in recent weeks,” the company said, “and by the costs associated with our support of customer connectivity as the population increasingly works and learns remotely from home.”
NBCUniversal and Sky, it added, are also in for a rough second quarter, with production and live sports at a standstill.
In Q1, Universal Pictures results illustrated the pandemic’s blunt force. Compared with the first quarter of 2019, which saw releases like Glass and How to Train Your Dragon: Hidden World, this year’s quarter was marked by truncated releases like The Invisible Man, hustled to VOD after theaters closed.
Universal has fought a war of words in recent days with theater owners after reporting positive results from the release of Trolls World Tour and indicating it plans to skip theaters on some future releases.
Film revenue plunged 22.5% to $1.4 billion, weighed down by a 29% drop in theatrical revenue.
NBCU’s theme parks were also buffeted by COVID-19, with Universal Studios locations in Japan, California and Florida closing for several weeks during the quarter. Parks revenue fell 32% to $869 million in the quarter, while earnings plummeted 85% to $76 million. The company cited higher operating costs related to “employee-related costs” and preparations for opening a new park in Beijing and a new Nintendo-themed attraction in Japan.
Sky’s total revenue fell 6% to $4.5 billion, while earnings dropped 17% to $551 million.
The debut of Peacock, Comcast’s direct-to-consumer streaming service, came outside the quarter on April 15.
Comcast said it lost 409,000 video customers in the period.
“Society is being challenged like never before in our lifetime, and I couldn’t be prouder of our company, our employees, and our leadership team,” CEO Brian Roberts said in the earnings release. “While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate. … This is a moment in time; and when it passes, I am very confident that the decisions we are making now will enable us to emerge from this crisis as a healthy, strong company that is well positioned to continue to grow and succeed.”
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