The earnings and revenue of Comcast for the second quarter beat analyst expectations, but the cable provider failed to add new broadband customers in a quarter for the first time in its history.
The high-speed internet customers of the cable provider remained flat in the second quarter of 2022, which saw its shares slide by almost 9% on Thursday morning.
The most lucrative product of Comcast is its high-speed broadband and the company is facing increasing competition for it.
The home broadband market has been dominated by the cable industry for over a decade, but wireless firms like T-Mobile now offer 5G home internet products that are giving them competition.
The second quarter saw T-Mobile add about 560,000 broadband years, which is significantly higher than the 338,000 it had added in the first quarter.
Brian Roberts, the CEO of Comcast, said that there would be a stabilization in mobile substitution. But, it should be noted that the cable operator’s broadband losses have not slowed down in the third quarter.
July saw the company lose about 30,000 broadband customers. Mike Cavangh, the Chief Financial Officer, noted that there may be subscriber addition by the end of the third quarter due to the back-to-school movement.
There was an increased in revenue by 5.1%, as compared to a year earlier, which reached $30.02 billion, thanks to the business from NBCUniversal’s studios and theme parks.
There was a 10.1% rise in adjusted earnings before taxes, interest, amortization, and depreciation, which saw it hit $9.8 billion.
The CEO said that the dip in broadband was only temporary, as the number of newer subscribers was limited because of the macroeconomic environment like higher inflation.
There was a 6.8% rise in the broadband revenue, which reached $6.1 billion in the quarter, thanks to a higher number of residential customers and higher rates, as opposed to a year earlier.
Roberts stated that they had managed to hit their highest EBITDA margin, even during a difficult and evolving macroeconomic environment, which has put pressure on the number of new clients.
There have been more than 3 million new subscribers of Comcast since March 2020.
Video customers decline
Data also showed that the quarter saw the company lose about 521,000 video customers and video subscribers fell by 1 million in the first half of the year.
Consumers are moving away from traditional pay-TV subscriptions because of a higher number of streaming options, such as NBCUniversal’s PeaCock, HBO Max, Disney+, and Netflix.
There was also a decline in voice customers by 286,000 in the second quarter, even though there was a 317,000 rise in wireless net clients.
A 30% increase was recorded in wireless revenue, as it climbed to $722 million. A 10% increase in business services saw them reach $2.4 billion.
Different divisions of Comcast made contributions to the company’s bottom line, such as Studios rising 33.3%, Media advancing by 3.6%, Theme parks adding 64.8%, and Cable Communications up by 3.7, while Sky was down by 13.8%.