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COVID Continues to Hurt Comcast Earnings in 3Q

Comcast Center in Philadelphia
The Comcast Center in Philadelphia (Image credit: Comcast)

Comcast reported lower third-quarter earnings as the pandemic hurt the company’s movie studio and theme parks, more than offsetting gains in its broadband business.

The company said its Peacock streaming service now has 22 million customer sign up, exceeding internal engagement expectations. In the second quarter, Comcast said it had 10 million Peacock signups. Cord cutting continued to hurt Comcast’s cable TV business, with residential video customers falling to 19.2 million from 20.4 million a year ago.

Related: Comcast Cable Delivers on Q3 Results

Comcast’s NBCUniversal unit had adjusted earnings before interest, taxes, depreciation and amortization of $1.281 billion, down 38.7%. Revenue was down 18.9% to $6.7 billion. 

The company’s broadcast TV divisions’ EBITDA increased 28.7% to $436 million as revenue rose 8.3% to $2.4 billion. The company said content licensing revenue was up 65.6% including transactions with Peacock, and distribution revenue rose 4.9% because of higher retransmission payments. 

Advertising revenue was down 11.5%. The company blamed lower ratings, offset by higher pricing and political ad sales at its local stations. 

Cable network EBITDA decreased 8.9% to $870 million in the quarter. Revenue fell 1.3% to $2.7 billion. Distribution revenue was down 3.8% because of money Comcast’s regional sports networks had to return to distributors because of games not played due to COVID-19. Advertising revenue was down 2.1% as ratings eroded. 

The company said that NBCU completed a successful upfront, “with strong volume commitments and higher pricing.”

Related: NBCU's Shell: Upfront Much Better Than Expected

At the company’s theme park business, EBITDA was negative, losing $203 million as revenue plunged 80.9% to $311 million. Filmed entertainment EBITDA was up 53.4% to $300 million despite revenue dropping 25% to $1.28 billion.

For all of Comcast, net income dropped 37.2% to $2.02 billion, or 44 cents a share, in the quarter from $3.22 billion, or 70 cents a share a year ago.

Revenue fell 4.8% to $25.5 billion. 

We are nearly eight months into this pandemic – and despite many harsh realities, I couldn’t be more pleased and proud of how our team has worked together across the company to find safe and creative solutions to successfully operate in this environment. We are executing at the highest level; and perhaps, most importantly, accelerating innovation, which will drive long-term future growth,” said CEO Brian Roberts.

Roberts noted that the company’s cable division added a record 633,000 high-speed internet customers and 556,000 net customers relationships, as well as the 22 million sign-ups for Peacock to data. 

Related: Peacock Cancels Flagship Series 'Brave New World'

“Going forward, and as we emerge from the pandemic, we believe we are extremely well positioned to provide seamless and integrated experiences for our customers and to deliver superior long-term growth and returns for our shareholders,” Roberts said.

Comcast’s cable unit reported a 10.5% increase in EBITDA to $6.41 billion as revenue rose 2.9% to $15 billion. Revenue from high speed internet jumped 10.1% to $5.198 billion while revenue from video declined 2.1% to $5.421. Business services revenue was up 4% to $2.049 billion, while ad revenue rose 11.8% to $674 million. 

Programming costs were up 4%.