Entertainment, communications and technology giant, Comcast, beat earnings expectations Thursday morning with better-than-expected results. Still the stock stumbled out of the gate.
Excellent growth in theme parks and streaming wasn’t enough to grow the Comcast stock on Thursday morning. As of publication of this article, Comcast had tumbled at 3% despite beating expectations in a big way. That might be surprising to the company’s leadership which was glowing in their assessment of the start to their fiscal year:
Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter ended March 31, 2024.
“Our team is continuing to execute exceptionally well in a dynamic and competitive marketplace,” said Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation. “We delivered doubledigit growth in Adjusted EPS and free cash flow while returning $3.6 billion to shareholders, investing
aggressively in our businesses, and maintaining our strong balance sheet. We grew broadband ARPU over 4%, delivered 7% revenue growth in our connectivity businesses, and expanded our Adjusted EBITDA margin across Connectivity & Platforms.In Studios, following a record year with eight Oscars including Best Picture, our film group continues to leverage our incredible IP with hits like Kung Fu
Panda 4; and Peacock remains one of the fastest growing domestic streamers with impressive acquisition, retention and engagement trends.Overall, I am proud of our ability to consistently perform atthe highest levels and continue to position the company for long-term growth.”
— Comcast Press Release, April 25th, 2024
First quarter highlights for the corporation included:
- Adjusted EPS increased 13.9% to $1.04; Generated Free Cash Flow of $4.5 Billion
• Total Return of Capital to Shareholders Increased 13.5% to $3.6 Billion Through a Combination of $1.2 Billion in Dividend Payments and $2.4 Billion in Share Repurchases
• Connectivity & Platforms Adjusted EBITDA Increased 1.5% to $8.2 Billion and Adjusted EBITDA Margin Increased 30 Basis Points to 40.5%. Excluding the Impact of Foreign Currency, Connectivity & Platforms Adjusted EBITDA Increased 1.3% and Adjusted EBITDA Margin Increased 50 Basis Points
• Domestic Broadband Average Rate Per Customer Increased 4.2%, Driving Domestic Broadband Revenue Growth of 3.9% to $6.6 Billion
• Domestic Wireless Customer Lines Increased 21% Compared to the Prior Year Period to 6.9 Million, Including Net Additions of 289,000 in the First Quarter
• Kung Fu Panda 4 Debuted in March and Grossed Over $480 Million in Worldwide Box Office Year-toDate, Contributing to the Panda Franchise’s Cumulative Total of $2.3 Billion. Oppenheimer Won 7 Oscars at the Academy Awards, Began Streaming Exclusively on Peacock Beginning in February and Was the Most Watched Pay 1 Movie in Peacock’s History
• Peacock Paid Subscribers Increased 55% Compared to the Prior Year Period to 34 Million, Including Net Additions of 3 Million in the First Quarter. Peacock Revenue Increased 54% to $1.1 Billion; Adjusted EBITDA Improved Compared to the Prior Year Period and Also on a Sequential Basis
So why the stock drop following such positive results? According to Investopedia, it all comes down to the streaming service, Peacock. Despite phenomenal results in theme parks, broadband and box office results, Peacock isn’t a profitable streaming service and that has spooked investors. Perhaps that’s a heck of a warning sign to Bob Iger and Disney as they trudge forward $30 billion in the hole with Disney Plus?
Perhaps more of the drop had to do with broadband subscription drops (as opposed to revenues).
For coverage of the Comcast Earnings Call as it happened, check out our partner coverage of the financial news with The Valliant Renegade Channel:
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