Comcast 2019: Strong Overall, Despite Pay Cable Subs Drop Of 733K

Comcast’s just-released earnings report for fourth quarter and full-year 2019 shows overall revenue, net income, EBITDA and EPS gains, but mixed results for individual units, including subscriber and advertising declines in video.  

Advertising declines in cable and broadcast largely reflected 2018 comparisons that included Olympics and Super Bowl revenues.

Comcast’s total revenue rose 2% in the quarter and 15.3% (to $108.9 billion) for the year, driven largely by high-speed internet, business services, and wireless.

Net income rose 25.9% in Q4 and 11.3% (to $13.1 billion) for the year. Adjusted EBITDA rose 3% for the quarter and 13.6% for the year. EPS rose 23.6% in Q4 and 11.9% (to $2.83) for the year.

“Looking ahead, in 2020 we are leaning into exciting opportunities, including further differentiating our broadband product in the U.S. through innovations like Flex and xFi Advanced Security; accelerating the deployment of Sky Q; launching a new broadband service in Italy and debuting Super Nintendo World at Universal Studios Japan, and introducing a world-class streaming service, Peacock,” said CEO Brian Roberts.

Peacock’s launch remains on track, management reported.

Within Cable Communications, net cable/video subscribers declined  by 149,000 cable in the quarter (133,000 residential, 17,000 business services) and dropped by a record 733,000 for the year (including 671,000 residential and 61,000 business services losses).

The unit saw a 19.1% decline in advertising, to $699 million, in Q4, and an 11.8% decline, to $2.47 billion, for the year.

Overall, however, the business increased its paid customers by a record 1.1 million, to 31.6 billion for the year, driven by a gain of 1.4 million high-speed internet subscribers (1.3 million of them residential).

Comcast ended the year with 20.2 million video subscribers, but 28.6 million broadband subs, up 5% from 2018's 27.2 million.

As a result, the unit saw overall adjusted EBITDA increase 7.3%, and adjusted EBITDA per customer grow 3.5%, for 2019.

NBC Universal’s overall 2019 revenue dipped 5% versus 2018, to $34 billion. The comparison includes $1.6 billion generated by the Olympics, as well as the Super Bowl, in 2018.

NBCU’s adjusted EBITDA rose 2% to $8.8 billion.

NBC Universal Cable Networks saw revenue decline 2.2%, to $11.5 billion, for the year, reflecting lower content licensing and advertising revenue.

Adjusted for $378 million generated in 2018 by the PyeongChang Olympics, however, total cable networks revenue rose 1%.

Cable Networks’ adjusted EBITDA ($4.4 billion) was flat versus 2018.

NBCU Broadcast Television saw revenue drop 10.3%, to $10.3 billion, for the year, due primarily to advertising declines.

Excluding $770 million generated by the Olympics and $423 million by Super Bowl LII, year-over-year revenue was flat.

Broadcast’s adjusted EBITDA rose 4.4% to $1.7 billion, as programming and production cost cuts made up for lower revenue.

The Filmed Entertainment segment’s revenue dropped 9.2% to $6.5 billion, reflecting lower theatrical revenue, partially offset by higher content licensing revenue.

Adjusted EBITDA rose 13.5% to $833 million, reflecting lower revenue, more than offset by lower operating expenses.

Pro-forma Sky revenue declined 3% to $19.2 billion. Excluding currency impacts, revenue rose 1.7%, reflecting content and direct-to-consumer revenue gains, partly offset by lower advertising revenue. Sky subscribers grew by 394,000 for the year. Sky’s pro forma adjusted EBITDA rose 12.2% to $3 billion for the year.

Theme Parks revenue rose 4.4% to $5.9 billion for the year, driven by higher consumer spending and attendance. Adjusted EBITDA was flat, at $2.5 billon.

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