Comcast reported its second-quarter 2023 earnings Thursday, revealing theatrical revenue rose 65.9% year over year with the release of “The Super Mario Bros. Movie,” while Peacock added just 2 million more subscribers over the three month period.
Released April 5, “Mario” grossed $1.3 billion in worldwide box office sales during the quarter, becoming the second-highest grossing animated movie of all time.
At the end of Q1, Comcast said its NBCUniversal streamer Peacock had reached 22 million U.S. subscribers. As of the quarter ended June 30, the Philadelphia owner ofNBCUniversal, Sky — and its large broadband and cable business —says Peacock has now hit 24 million subs.
Peacock’s addition of 2 million subscribers in Q2 came before the first-ever announced price increase in mid-July, with the price of Peacock Premium (with ads) increasing by $1, to $5.99 per month, and Peacock Premium Plus (which is mostly commercial-free) up $2, to $11.99 per month.
According to Comcast, those 2 million new Peacock customers were mostly a result of converting Comcast Xfinity’s free Peacock subs to paying users in June, when the complimentary subscriptions were ended.
Peacock revenue in the quarter jumped 85% year over year to $820 million, while the streamer’s adjusted operating loss in Q2 was $651 million (39% greater than -$467 million in the year-ago period).
Elsewhere at Comcast, revenue at Universal’s theme parks jumped 22% to $2.21 billion with the opening of Super Nintendo World at Universal in Hollywood and a post-pandemic surge in attendance at Universal Beijing and Universal Japan.
Overall revenue from Comcast’s studios division (which includes box office sales, as well as content licensing and “other” revenue) was down 0.9% from last year. Theatrical drew the above-mentioned 65.9% revenue increase, while content licensing fell nearly 20% and “other” increased 19%.
Media segment revenue inched up 0.1% overall, with international networks up 6.7% and domestic distribution climbing 2.2%. However, U.S. ad sales dipped 4.9%, as did “other” media revenues.
Comcast saw revenue rise just 0.1% year over year at its connectivity businesses. Business services connectivity increased 4%, while residential connectivity and platforms was down 0.4%.
Comcast shed 228,000 connectivity and platforms customers during Q2. Total domestic broadband customer net losses were 19,000. Domestic wireless additions were 316,000. U.S. video customer losses were 543,000.
Domestic broadband sales increased 4.4%, while the Xfinity wireless segment revenue rose 20.4% and international connectivity revenue increased 26.7%. Video revenue decreased 5.6% and ad sales fell 10.7%.
Wall Street forecast earnings per share (EPS) of 97 cents on $30.13 billion in revenue, according to analyst consensus data provided by Refinitiv. Comcast reported adjusted EPS of $1.13 on $30.5 billion in revenue, representing a 11.9% for adjusted EPS and 1.7% increase year over year for revenue.
Comcast’s net income stood at $4.2 billion, rising to $4.7 with some favorable adjustments.
Free cash flow was $3.4 billion for the quarter, up 7.9% from the comparable period in 2022.
“The consistent investments we’ve been making in our growth businesses continue to generate strong results and position us extremely well both now and into the future,” Comcast CEO Brian Roberts said in a letter to shareholders. “Second quarter operational and financial performance was excellent and included a double-digit increase in Adjusted EPS and significant free cash flow generation. This quarter contained a number of highlights and notable achievements. We not only continued to deliver solid revenue growth in our connectivity businesses but also expanded our Adjusted EBITDA margin at Connectivity & Platforms. We generated the best quarterly Adjusted EBITDA ever at Theme Parks, had the second-highest grossing animated film of all time in worldwide box office revenue with ‘Super Mario Bros.,’ and nearly doubled paid Peacock subscribers year-over-year. At the same time, we returned a healthy amount of capital to shareholders and maintained an enviable balance sheet. Our experienced and expert management team is executing at an exceptional level, and our long-term-oriented growth strategy is clearly working.”
Comcast stock closed Wednesday at $42.91 per share. The regular U.S. stock markets will reopen at 9:30 a.m. ET.
Roberts and other Comcast executives will host a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.
