Comcast tops estimates despite Peacock losses, CEO exit

Comcast Corp. topped analysts’ estimates for profit in the first quarter even as the media and telecommunication conglomerate continues to lose cable TV subscribers and faces increasing competition in broadband services.

The owner of Xfinity broadband and cable services, the NBCUniversal media empire and Sky TV, reported earnings excluding one-time items of 92 cents a share on $29.7 billion in revenue. The results were boosted by gains at its studio and theme park businesses, which opened Super Nintendo World at Universal Studios Hollywood in February. Analysts were looking for profit of 83 cents a share on $29.4 billion in sales. 

The company was rocked last weekend by the abrupt ouster of Jeff Shell, the CEO of NBCUniversal, who was fired after it was disclosed he had an inappropriate relationship with an employee. Comcast President Mike Cavanagh has taken charge of the business, and will have to steer the company through a complex set of challenges, from a struggling streaming service to the hemorrhaging of cable TV subscribers. The company says it’s not immediately seeking a replacement for Shell.

During Comcast's call with investors, Cavanagh said the loss of Shell wouldn’t have an impact on NBCU’s strategy. Cavanagh, who has been with the company for almost eight years, said he has long had insight into the media division's operations but that it's “unfortunate to have an unexpected change in leadership.”

“Job number one for me is to settle things down and make sure the business and the business leaders and NBCU remain focused,” said Cavanagh. “Frankly, I don’t think the business is going to miss a beat.”

Cavanagh did not specify whether a new CEO would be named. “Me stepping in to oversee NBCU is quite sustainable,” he told investors, adding that he is “going to be here for a long time.”

Comcast’s streaming service Peacock added about 2 million subscribers in the quarter, bringing the total to 22 million. The video service had an adjusted loss before interest, taxes, depreciation and amortization of $704 million on revenue of $685 million. Analysts predicted an adjusted Ebitda loss for Peacock of $727.9 million on $718 million in sales.

Cavanagh has said that Peacock losses will probably reach a low point of $3 billion this year, though the company hasn’t given a time frame for when it expects to reach a profit. Comcast has spent heavily on Peacock, a late entrant in the streaming wars that still trails behemoths like Netflix and Amazon Prime. 

Comcast added 5,000 customers to its cornerstone broadband service, an area where the company is investing heavily to gain market share and strengthen its brand. Analysts were looking for a loss of about 7,900 internet subscribers, reflecting a reversal from a pandemic surge and a fierce rivalry with fixed wireless and fiber-based wireline networks.

Cord cutting and competing wireless and fiber competition has eroded Comcast’s traditional customer base. To fight back, the Philadelphia-based company has raised rates and bundled wireless service to try and offset lost revenue. In the first quarter, the company lost 614,000 TV subscribers and gained 355,000 wireless customers.

—Bloomberg News and Ad Age's Parker Herren