Comcast felt the impact of the coronavirus shutdown in the second quarter as the media giant posted double-digit declines in revenue and profits.
The parent company of NBCUniversal stated in its Q2 earnings report Thursday that the fledgling Peacock streaming service has generated 10 million “sign-ups” since it debuted in April for Comcast Xfinity customers and on July 15 nationally.
All told, Comcast revenue slid 11.7% year-over-year for the quarter to $23.7 billion. Adjusted net income dropped 12.2% to $3.17 billion. On the plus side, Comcast units saw expenses decline as business activity was curtailed amid the quarantine conditions forced by the pandemic.
Given that Wall Street was expecting to a dismal Q2 for businesses in virtually every sector, Comcast was seen as surpassing lowered expectations for the quarter. Comcast shares inched up in trading Thursday despite the gloomy economic outlook reinforced by Thursday’s news from the Commerce Department that the nation’s Gross Domestic Product fell a record 9.5%, or $1.8 trillion, in the quarter.
“Overall, based on our results and the many organic growth opportunities that we have across our company, I am confident in our ability to continue to successfully navigate the impact of COVID-19, and emerge from the crisis even stronger,” said Comcast chairman-CEO Brian Roberts.
Comcast’s cable division delivered its highest volume of new customers for a Q2 in 13 years, fueled by high-speed internet additions of 323,000. Comcast’s video subscribers declined by 477,000 across business and residential customers for the quarter.
NBCUniversal saw a whopping 25.4% drop in revenue for the quarter to $6.1 billion compared to the year-ago benchmark. Adjusted earnings before interest, taxes, depreciation and amortization sank 29.5% to $1.6 billion, driven by a 167.7% plunge in revenue for the theme park division as its Universal Studios parks in Hollywood, Orlando, Fla., and Japan were shuttered by the pandemic.
Lower programming and production costs because of canceled or postponed sporting events and content production helped offset a steep 27% year-over-year decline in advertising at NBCU’s cable networks and a 27.9% plunge at broadcast networks NBC and Telemundo.
Revenue at the cable networks dropped 14.7% to $2.5 billion. Revenue for the broadcast side ebbed only 1.6% because it was buoyed by a 58.5% spike in content licensing revenue — some of which was driven by NBCU acquiring rerun rights to its own programming for Peacock. Adjusted EBITDA for cable (up 3.5% to $1.2 billion) and broadcast (up 20% to $641 million) was in positive territory because of lower programming expenses.
Theatrical revenue for the filmed entertainment unit disappeared to the tune of a 96.8% quarter-to-quarter decline as movie theaters around the world were also forced to close due to quarantine conditions. Overall revenue for the filmed entertainment group fell 18.1% to $1.2 billion.