Comcast's Q4 2023 Financials: Revenue Grows, EPS Beats Estimates Despite Subscriber Declines and Peacock Losses
Comcast announced its financial results for the fourth quarter of 2023, reporting an increase in overall revenue and exceeding analyst expectations for adjusted earnings per share. The company experienced a decline in domestic broadband and pay TV subscribers, while its mobile subscriber base continued to grow. The Peacock streaming service expanded its subscriber count but also reported increased losses for the quarter.
Overall Financial Performance
Comcast's total revenue for the fourth quarter stood at $32.31 billion, marking a 1.2% increase from $31.9 billion in the prior-year quarter and generally aligning with analyst forecasts of $32.35 billion. Adjusted earnings per share (EPS) were reported at $0.84, exceeding analyst expectations of $0.75 or $0.76.
However, adjusted EPS decreased by 12.4% compared to the previous year.
Net income attributable to Comcast decreased by approximately 55% to $2.17 billion ($0.60 per share) from $4.78 billion ($1.24 per share) in the fourth quarter of the prior year. Adjusted net income was $3.06 billion, or $0.84 per share. Adjusted EBITDA decreased by 10% to $7.9 billion.
Connectivity and Platforms Unit
The Connectivity and Platforms unit, which includes Xfinity broadband, pay TV, and mobile services, recorded a revenue decrease of 1.1% to $20.24 billion.
- Broadband: The domestic broadband business reported a loss of 181,000 customers. Domestic broadband unit revenue decreased by 1% to approximately $6.32 billion, due to customer losses partially offset by increased average rates.
- Mobile: The mobile service added 364,000 customers during the quarter, bringing its total subscriber base to over 9.3 million. This growth aligns with Comcast's stated focus on its mobile business amid competition in the broadband market from wireless providers.
- Pay TV: The unit lost 245,000 pay TV customers, resulting in a total of 11.27 million subscribers.
Media Unit (NBCUniversal)
Revenue for the Media unit, encompassing NBCUniversal, increased by 5.5% to $7.62 billion. The broader Content and Experiences unit reported revenue growth of 5.4% to $12.7 billion.
- Advertising: Domestic advertising revenue for the media business rose 1.5%, attributed to the inclusion of NBA content.
- Film Studios: Universal film studio revenue decreased by 7.4% to $3.03 billion. This decline was attributed to lower licensing and theatrical revenue, with film releases such as 'Wicked: For Good' and 'Black Phone 2' generating lower revenue compared to prior-year titles.
- Theme Parks: Universal theme parks revenue increased by 22% to approximately $2.9 billion, primarily due to factors related to the upcoming opening of Epic Universe.
Peacock Streaming Service
Peacock, Comcast’s streaming service, reported a fourth-quarter loss of $552 million. This represents an increase from the $372 million loss recorded in the same period last year and was partly attributed to the new NBA rights deal and an exclusive NFL game on the platform.
Despite increased losses, Peacock's revenue reached $1.6 billion, up from $1.3 billion in the prior-year quarter. The service also gained 3 million paid subscribers during the quarter, bringing its total to 44 million by year-end, an increase from 36 million a year ago.
Comcast CFO Jason Armstrong stated that Peacock has "reached meaningful scale" and projected that losses would "meaningfully improve again" by 2026.
Strategic Developments and Commentary
Comcast recently completed the separation of most of its cable networks into Versant Media Group, with Mark Lazarus appointed as CEO. The company is also focusing on enhancing support for its broadband, wireless, and entertainment distribution platforms, including adjustments to packaging and pricing, under the leadership of Steve Croney, CEO of the Connectivity and Platforms division.
Comcast Chairman and CEO Brian Roberts commented on the broader market landscape, including industry consolidation. Roberts noted that Comcast had explored an opportunity with Warner Bros. Discovery but withdrew interest when the deal was deemed to require an all-cash transaction, which the company considered too straining for its balance sheet at current valuations.
Roberts added that Comcast is observing further consolidation and remains open to exploring opportunities to build value.