Comcast Corp. (NASDAQ:CMCSA) reported better-than-expected third-quarter earnings Thursday as growth in NBCUniversal’s media business and Peacock helped offset continued broadband subscriber losses and weakness in theme parks.
The Philadelphia-based company reported revenue of $29.298 billion, down 6.1% year over year but above analysts’ consensus estimate of $29.269 billion, according to Benzinga Pro.
Adjusted earnings of $1.07 per share beat analysts’ expectations of 98 cents.
Peacock Revenue Surges 34% As Media Business Expands
Comcast’s media revenue increased 13% to $5.36 billion, driven by World Cup programming and stronger performance at Peacock.
Peacock revenue jumped 34% to $1.8 billion, while the streaming service generated $261 million in adjusted EBITDA, reversing a $217 million loss a year earlier.
Paid subscribers increased 17% year over year to 48 million.
Universal’s film business also contributed to results, with “The Odyssey” becoming the studio’s highest-grossing film.
Studio adjusted earnings before interest, taxes, depreciation and amortization rose 18.6% to $402 million, although lower content licensing revenue pushed overall studio revenue down 1.1%.
Comcast Loses 144,000 Broadband Customers
Comcast lost 144,000 residential broadband customers during the quarter, compared with 91,000 losses a year earlier, marking an approximately 58% increase in subscriber losses.
The decline was steeper than the 133,000 losses expected by analysts, according to Bloomberg.
Competition from wireless and fiber providers continued to pressure the business.
Comcast CFO Jason Armstrong called rival fiber providers’ $30-to-$40 broadband pricing in certain markets “irrational competition,” warning that competitive pressures intensified in the second half of the year.
Video subscriber losses increased 6.8% to 274,000 as more consumers shifted toward streaming services.
Comcast is responding by combining broadband with Xfinity Mobile offerings and introducing promotional deals to attract and retain customers.
The company added 368,000 mobile lines during the quarter, bringing its wireless customer base to 10.6 million.
Theme Park Profit Falls As Costs Rise
Theme park revenue declined 4.4% to $2.6 billion, while adjusted EBITDA fell 17.1% amid higher operating expenses and weaker revenue.
Connectivity & Platforms adjusted EBITDA decreased 4.4% to $7.6 billion. The segment’s adjusted EBITDA margin narrowed 70 basis points to 38.6%.
Management expects theme park performance to improve through 2027, with a return to growth anticipated in the second half of the year.
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Comcast Plans Job Cuts And Business Restructuring
Comcast is preparing significant job cuts and a broader reorganization of its cable, broadband and wireless operations as it reshapes its business, Bloomberg reported Wednesday.
The restructuring aims to simplify operations, improve efficiency and free up cash for future investments as the company faces continued pressure on broadband and video subscriptions.
Comcast is also pursuing a proposed separation involving NBCUniversal and Sky, following its earlier separation of cable networks into Versant.
CNBC reported Thursday that co-CEO and Chair Brian Roberts previously said the separation would allow the businesses to operate with greater strategic flexibility, dedicated management attention and investment priorities.
Wireless And Enterprise Services Offer Growth Opportunities
President Mike Cavanagh described wireless as a “tremendous growth opportunity,” pointing to Comcast’s capital-light business model and ability to leverage its existing broadband and Wi-Fi networks.
Wireless lines increased 18% year over year to 10.6 million. About 70% of customers receiving free mobile lines are converting to paid relationships, according to management.
Comcast also sees opportunities in enterprise services as businesses invest in advanced connectivity, managed networking and cybersecurity products.
The company is exploring edge computing opportunities across its network of roughly 1,400 headends and 250 megawatts of capacity, potentially creating another source of long-term growth.
Peacock Expands Through YouTube Partnerships
Cavanagh said Comcast is expanding Peacock’s distribution through third-party bundles after initially emphasizing direct-to-consumer subscriber growth.
A new YouTube Premium-Peacock bundle is designed to attract younger consumers who engage with NBC content but have not subscribed to Peacock.
Comcast also extended its YouTube TV distribution agreement, expanded advertising partnerships and is exploring international growth opportunities.
Management remains open to additional distribution partnerships while seeking to minimize the risk of existing subscribers switching to discounted bundles.
Comcast Uses AI To Cut Customer Service Costs
Chief Financial Officer Jason Armstrong said Comcast is accelerating artificial intelligence adoption across its network and customer service operations through partnerships with Sierra and Cresta.
The initiatives have helped reduce customer service contact rates by roughly 20% and eliminate more than 30 million service interactions year to date, according to the company.
Comcast also participates in the Personal Agent Protocol initiative led by Sierra and Meta Platforms Inc. (NASDAQ:META).
Separately, Comcast is working with Starlink to combine satellite connectivity with Comcast Business managed services for enterprise customers.
Executives said the company remains open to additional technology and network partnerships.
Cash Flow Remains Strong Despite Business Pressures
Comcast generated $4.2 billion in free cash flow during the quarter and returned $1.2 billion to shareholders through dividends.
As previously announced, the company suspended share repurchases beginning in the third quarter and expects the pause to continue through its proposed business separation.
Connectivity & Platforms capital expenditures rose 3.6% to $2.4 billion, reflecting increased spending on customer equipment and network infrastructure.
Capital spending in Content & Experiences declined 10.6% to $639 million.
Management identified wireless convergence, business services, Peacock partnerships, AI adoption and restructuring as long-term growth opportunities.
Executives expect modest improvement in connectivity trends during the fourth quarter, although broadband competition and theme park weakness remain near-term challenges.
Price Action: Comcast shares rose 5.07% to $23.21 on Thursday at the time of publication, according to Benzinga Pro.
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