Olympics Help Comcast Exceeds Q3 Estimates

Comcast reported strong growth in several segments in the third quarter, despite ongoing challenges in traditional media segments.

The telecommunications and media giant Comcast (CMCSA 3.73%) reported third quarter earnings on Thursday, October 31st that beat analysts’ estimates. Adjusted earnings per share (EPS) were $1.12, beating analysts’ expectations of $1.066 and up 3.3% year-over-year. Revenue came in at $32.1 billion, beating consensus estimates of $31.8 billion.

The results showed effective strategic changes in areas such as broadband and wireless, although some challenges remain in the traditional media and theme park segments.

Metrics	3rd quarter of 2024	Analyst’s assessment	3rd quarter of 2023	Change (YOY)
Adjusted EPS	$1.12	1.066 USD	1.08 USD	3.3%
Income	32.1 billion dollars	31.8 billion dollars	30.1 billion dollars	6.5%
Adjusted EBITDA	9.74 billion dollars	–	9.96 billion dollars	(2.3%)
Net profit	3.63 billion dollars	–	4.05 billion dollars	(10.3%)
Net increase in video customers (losses)	(365,000)	(420,000)	(490,000)	–
Net growth of broadband subscribers (losses)	(87,000)	(146,000)	(18,000)	–
Adding a subscriber network (losses)	319,000	301,000	294,000	–

Source: Comcast. Note: Analyst consensus for the quarter provided by FactSet. YOY = year over year. EBITDA = earnings before interest, taxes, depreciation and amortization.

Overview of Comcast operations

Comcast provides broadband, wireless and content services through various brands including Xfinity, NBCUniversal and Sky. Its operations span the US, UK and Italy, offering connectivity, streaming and media services. As a key player in the telecommunications industry, Comcast relies heavily on its broadband services, which form the basis of its revenue and growth strategies.

Comcast has recently focused on expanding its wireless and broadband offerings while strategically investing in streaming media services like Peacock. This includes adapting to market changes by integrating more digital and streaming options, which are expected to drive future growth.

Highlights of the quarter

ComcastThe company’s revenue jumped 6.5% to $32.1 billion in the third quarter, reflecting ongoing strategic changes at the company. Broadband revenue rose 2.7% to $6.5 billion on 3.6% growth average revenue per user (ARPU) despite a net loss of 87,000 broadband customers. This failure was due to the end of the Affordable Connectivity Program (ACP). Excluding the impact of ACP, Comcast showed resilience with modest customer gains.

In the wireless segment, Comcast’s domestic subscriber lines grew 20%, adding 319,000 lines, reflecting the success of its strategic focus on the convergence of wireless and broadband offerings. Peacock, the conglomerate’s streaming service, saw a 29% rise in paid subscribers to 36 million thanks to its 2024 Summer Olympics programme. As a result, Peacock’s revenue grew 82% year-over-year to $1.5 billion.

On the media side, while overall adjusted EBITDA declined due to higher costs, studios performed well with adjusted EBITDA growing by 9%. Film Despicable me 4 became a key player, achieving nearly $1 billion in global revenue. However, the theme parks segment saw a 5.3% drop in revenue and a 13.8% decline in adjusted EBITDA, due to lower visitor numbers and stagnant attraction development.

Looking ahead

I look forward to Comcast management did not provide specific guidance for the fourth quarter or the full year in this report. Other reports said the company plans to maintain its competitive edge by upgrading its network with DOCSIS 4.0 in an effort to boost broadband speeds. It is also focusing on improving wireless services, which is contributing to a significant increase in the number of customers.

Going forward, Comcast’s strategic media partnership, like the NBA deal, aims to diversify content offerings and increase audience engagement. Future developments such as the launch of the Epic Universe theme park in Florida in 2025 are set to invigorate the theme park segment. Strategic partnerships and infrastructure investments are likely to drive Comcast’s continued growth, which is critical as it deals with challenges in its more traditional lines of business.

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