Comcast topped Wall Street analysts’ forecasts for the COVID-19-hit second quarter, with total revenue slipping 12% from a year ago to $23.7 billion and adjusted earnings per share reaching 69 cents.
While the earnings figure declined from 78 cents in the year-ago quarter, it was far higher than the consensus expectation of 55 cents. The company’s shares, which have recently rallied to their highest level since February, gained ground in pre-market trading.
Revenue at NBCUniversal dropped 25% in the quarter, to $6.1 billion. Advertising, as expected, took a major hit, declining 27%. Distribution revenue fell 15%, with the more moderate decline caused by credits given to some of the company’s regional sports networks due to games not played by pro sports teams during COVID-19.
Universal’s film operation saw revenue fall 18% to $1.2 billion, with pandemic-related theater closures delivering pain but licensing helping offset those losses. The company called out premium video on demand contributions from Trolls World Tour and The King of Staten Island, but it did not provide any specific numbers and said comparisons with the prior-year quarter were difficult. (The Secret Life of Pets 2 was a hit in the 2019 quarter.)
One new data point for NBCU in its quarterly report was adoption of Peacock, its new streaming service, which launched on Comcast platforms in April and nationally this month. Comcast reported 10 million sign-ups to date for the service, though that number should be put into some context.
Peacock, whose free and premium tiers are both supported by advertising, was offered at no cost to the company’s existing customers on Xfinity X1 and Flex, starting in April. A “sign-up,” therefore, means something different within Comcast than a sign-up does for direct-to-consumer services like HBO Max or Disney+. The $5 a month non-Comcast customers were able to start paying in July is not reflected in the period and advertising, not subscription revenue, is the primary strategic focus.
Comcast, which operates the No. 1 cable TV system in the U.S., shed 427,000 residential video customers in the quarter, ending June with just shy of 19.5 million subscribers. The cable division provided stability in the period, though, with revenue flat at $14.4 billion as strength in broadband offset expected pay-TV declines. High-speed internet revenue rose 7% to $5 billion. Unlike differently constituted rivals in the media and entertainment sector, Comcast’s broadband business offers it an anchor during the financial storm of the pandemic.
Sky revenue fell 15.5% to a bit less than $4.1 billion, with advertising off 42% and content revenue down 36%. The pandemic’s elimination of most sports in the quarter hit Sky especially hard, though in recent weeks Germany’s Bundesliga, Italy’s Serie A and the UK-based Premier League have all returned to action. The satellite division said it retained 99% of its total customers and 95% of sports subscribers during the quarter.
CEO Brian Roberts and other top executives were expected to offer comments on various fronts during a conference call with analysts to discuss the quarterly results. Among the topics will be the rollout of Peacock, trends in advertising and a deal between Universal Pictures and AMC Entertainment regarding the theatrical release window for new movies.