COMCAST CORP CLASS A (CMCSA) Earnings Summary for Q3 FY2024

Key Metrics

Key Operating Metrics for COMCAST CORP CLASS A (CMCSA) Q3 2024 Earnings:

Connectivity & Platforms:

• Total Connectivity & Platforms Revenue: $20,291 million (-0.5% yoy)
• Adjusted EBITDA: $8,295 million (0.9% yoy)
• Passings: 63,355 thousand homes and businesses passed
• Residential Relationships: 31,324 thousand
• Residential Broadband Customers: 29,504 thousand
  • Total Broadband Net Adds: (79) thousand
• Video Customers: 12,834 thousand
  • Net Adds: (365) thousand
• Total Wireless Lines: 7,519 thousand
  • Net Adds: 319 thousand

Content & Experiences:

• Total Content & Experiences Revenue: $12,599 million (19.3% yoy)
• Adjusted EBITDA: $1,802 million (-8.7% yoy)
  • Media: $650 million
  • Studios: $468 million
  • Theme Parks: $847 million

Forward guidance

1. Epic Universe Opening: Scheduled to open on May 22, 2025, with expected high demand for vacation packages.
2. Pre-Opening Costs for Epic Universe: Anticipated total of $150 million in pre-opening costs, split between Q4 2024 and Q1 2025.
3. Broadband Expansion: Projecting to add over 1.2 million new homes passed in 2024.
4. Connectivity Revenue Growth: Domestic broadband revenue expected to grow at a mid-single-digit rate, with wireless revenue growing by 19%.
5. Media Segment Growth: Peacock revenue growth projected at 82%, with continued focus on strong revenue growth and improving profitability.
6. Capital Expenditures: Anticipated catch-up in CapEx spending in Q4 2024 to align with full-year guidance.
7. Churn Management: Expect churn to remain low in Q4 2024, supported by retention strategies and product bundling.

Key takeaways

• Positives:
  • Mike Cavanagh emphasized Comcast's competitive edge in convergence, stating, "We are positioned to win" with 63 million homes able to receive gig-plus broadband, which is expected to maintain a lead over competitors' fiber buildouts.
  • The Paris Olympics generated record revenue of $1.9 billion, with Mike noting, "The games were profitable," showcasing NBCUniversal's strong media performance and its impact on broadband subscriber interest.
  • Jason Armstrong highlighted a 19% revenue increase in the Content & Experiences segment, driven by the Olympics and a robust film slate, indicating strong demand for Comcast's entertainment offerings.
  • Comcast's capital allocation strategy remains disciplined, with $3.2 billion returned to shareholders, including $2 billion in share repurchases, reflecting a commitment to shareholder value.
• Negatives:
  • Despite overall revenue growth, broadband subscriber losses of 87,000 were reported, with Dave Watson attributing this partly to the end of the Affordable Connectivity Program (ACP), indicating potential future challenges in subscriber retention.
  • The theme park segment saw a 5% revenue decline, with management acknowledging a "pull-forward of demand" from previous years, suggesting a potential slowdown in growth until the opening of Epic Universe in 2025.
  • Competitive pressures remain intense, with Jason noting, "The underlying environment remains the same, very competitive," which could impact pricing power and market share as new fiber competitors enter markets.
  • The exploration of a potential spin-off of cable networks indicates uncertainty in the media landscape, with Mike Cavanagh stating, "We want to study it," reflecting a cautious approach to strategic changes amidst industry transitions.

Peer Summary

• Consumer Demand Softening: Disney's Bob Iger noted, "The lower income consumer is feeling a little bit of stress," which could impact attendance and spending at parks, reflecting broader economic pressures affecting consumer behavior.
• Competitive Pressures: Charter's Christopher Winfrey stated, "We're still very much in an atypical low churn environment when you exclude ACP," indicating ongoing competitive challenges that may affect market share and pricing power.
• Subscriber Retention Challenges: AT&T's John Stankey acknowledged, "There are green shoots," in transitioning from legacy services, but noted slow progress, highlighting potential difficulties in retaining broadband customers amidst industry shifts.
• Content Strategy Uncertainty: Netflix's Ted Sarandos admitted that the Hollywood strikes caused a "lumpier" content schedule, which may affect engagement and retention, emphasizing the volatility in content availability across the sector.
• Investment Pressures: Verizon's Hans Vestberg mentioned potential headwinds from economic conditions affecting consumer spending, indicating that external factors may impact future revenue growth across the industry.