Comcast sinks 8% as Q1 shows healthy financials, broadband slowdown
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Comcast stock (NASDAQ:CMCSA) was 8% lower early Thursday on heavy trading volume, despite a strong first-quarter earnings report that featured a beat on top and bottom lines, growth in its Peacock streaming platform and an increased capital return to shareholders.
The company did see a significant slowdown (of 43%) in broadband growth - a little unsurprising vs. pandemic comparisons, but decelerating high-speed Internet growth had become a sector-wide warning from industry analysts in the fall and winter, driving broadband stocks lower.
Comcast's revenue jumped 14% to $31 billion, clearing consensus by more than $600 million, and adjusted net income rose by double digits to $3.9 billion.
Adjusted EBITDA rose 8.8% to $9.15 billion.
"In cable, we are increasing the capacity of our broadband network and providing our customers with cutting-edge equipment that delivers the best in-home experience," CEO Brian Roberts said. "Our media business is performing well, and the scale of our reach is underscored by our successful broadcast of the Super Bowl and the Olympics in the same week."
Revenue by segment: Cable Communications, $16.54 billion (up 4.7%); NBCUniversal, $10.3 billion (up 46.6%); Sky, $4.78 billion (down 4.5%).
Adjusted EBITDA by segment: Cable Communications, $7.27 billion (up 6.5%); NBCUniversal, $1.6 billion (up 7.4%); Sky, $622 million (up 71%).
One other aspect that sellers may have nitpicked is cash flow: Net cash from operations fell 6.4% to $7.3 billion - based on a near-$1 billion swing in receivables - and with capital expenditures flat, free cash flow then fell 10%, to $4.76 billion.
On the cable side, total customer relationships rose by 194,000 to 34.4 million; residential customer relationships rose by 185,000, and business by 9,000.
Total broadband net adds were 262,000 - down from adds of 461,000 in the prior-year period - while video customer net losses were 512,000, and voice net losses were 282,000. The unit also added 318,000 wireless lines. The 262,000 broadband adds cleared expectations, but the company noted about 80,000 of those customers are free "Internet Essentials" customers.
Subscribers paying for Peacock made a key jump in the quarter - up by more than 50%, to about 13 million - which it credited largely to big events including the Super Bowl and Olympics. The service had 28 million monthly active accounts as of March 31.
On Wednesday, Comcast and Charter announced they were teaming up on a joint venture to offer a streaming hardware platform to take on Roku, Amazon and other rivals.