Yahoo Finance Comcast Pulls Off Earnings Beat Despite Subscriber Losses
(Bloomberg) -- Comcast Corp. gained by the most in six months after reporting earnings that surpassed Wall Street’s expectations. That’s despite continuing subscriber declines for the US cable giant.
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Revenue climbed 2.3% to $31.3 billion in the fourth quarter, well above the $30.4 billion that analysts had expected. Adjusted earnings per share gained to 84 cents, also beating projections.
The upside surprise suggests that the largest US cable company — owner of the Xfinity broadband service — has found a way to sustain profits despite a prolonged decline in subscribers: get people to spend more. Comcast has been losing customers to rivals deploying fast fiber connections and improving their own wireless offerings. But those that stick with Comcast were spending on average 3.9% more in the fourth quarter as they moved toward more expensive higher-speed offerings.
The gain in average revenue per user “suggests sustained pricing power,” Geetha Ranganathan, an analyst at Bloomberg Intelligence, said in a note.
Shares were up as much as 5.8% at $46.34 in New York trading, the biggest intraday gain since July 27.
In all, Comcast lost 389,000 cable-TV customers and shed 34,000 domestic broadband subscribers, in the fourth quarter — fewer than analysts had expected.
Philadelphia-based Comcast also increased its dividend by 8 cents to $1.24 a share for 2024 and boosted its share buyback program to $15 billion.
Comcast offers wireless mobile through the Xfinity brand as part of a package for internet subscribers. The company said it added 310,000 mobile phone customers, fewer than the 329,000 analyst predicted. Competitors AT&T Inc. and Verizon Communications Inc. reported subscriber gains earlier in the week.
Comcast is also the owner of the NBCUniversal media empire and Sky TV. During the quarter, the company added 3 million subscribers to its Peacock streaming service, reaching a total of 31 million. The Peacock business lost $825 million during the quarter, 15% less than the same period a year ago.
Read More: NFL, NBC Executives Defend Having a Playoff Game Only on Peacock
The company’s film studio, the largest in the world last year thanks to hits like The Super Mario Bros. Movie and Oppenheimer, earned $308 million in the quarter. Its theme parks generated Ebitda of $872 million.
In a call with investors, Comcast Chief Executive Officer Brian Roberts played down any potential for major dealmaking. “While there may be speculation of what we could do next, I’d like you to hear it directly from me: I love the company we have,” he said. “So the bar continues to be even higher for us to do anything other than the plan you heard today.”
(Updates with share move in first paragraph)
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