Comcast Corporation reported its fourth quarter and full year 2023 financial results on January 25th, 2024, exceeding Wall Street expectations but continuing to lose video and broadband subscribers.
- Revenue grew 2.3% to $31.3 billion, surpassing analyst estimates
- Adjusted EPS of $0.84 beat expectations by $0.06 per share
- Net income increased 8.5% to $3.55 billion
- Free cash flow reached nearly $16 billion for the full year
“Despite ongoing changes in consumer behavior accelerated by COVID, we continue to execute extraordinarily well operationally,” said Comcast CEO Brian Roberts.
Declining Subscribers Across Video and Broadband
Even as financial results impressed, Comcast continued to lose subscribers in its core business segments:
|Video (Pay TV)
The company has been losing cable TV subscribers for over a decade as more consumers shift to streaming services and internet-based platforms. Increasing competition in broadband from fiber optic providers has now led to subscriber erosion there as well.
“We expect these trends to continue, with video subscriber declines ranging from -3% to -5% annually,” admitted management on the earnings call.
Growth Areas: Theme Parks and Peacock
Declining cable and broadband subscribers were offset by growth in other segments:
- Theme Parks saw record annual attendance and hotel occupancy on strong demand for parks like Universal Studios and Islands of Adventure
- Peacock streaming service added 3 million subscribers to reach over 20 million as management continues “investing heavily” in content
However, Peacock is still losing money with an EBITDA loss that widened from $647 in Q4 2022 to $825 million this past quarter. Bringing Peacock to profitability remains a top priority for management despite the ongoing losses.
2023 Highlights and 2024 Outlook
“Despite competitive challenges, 2023 was another strong year for Comcast,” said Roberts. “Our uniquely diversified business mix allows us to thrive today while simultaneously investing for tomorrow.”
Full year 2023 highlights include:
- Revenue growth of 4.5%
- Adjusted EBITDA growth of 5.6%
- $16 billion returned to shareholders via dividends and buybacks
For 2024, Comcast expects stable adjusted EBITDA with continued heavy investment into broadband infrastructure and further expansion of theme parks like Epic Universe. The company forecasts Peacock losses peaking in 2024 before the streaming service turns profitable by 2025.
Management is bracing for further subscriber declines across cable TV and residential broadband while growing other technology-oriented segments like wireless, business services, studios and theme parks.
“We have proven we can drive growth despite the challenges facing our industry,” affirmed Roberts on the earnings call. “Our team continues executing at the highest level.”
Comcast delivered financial results that impressed Wall Street while warning of continued subscriber erosion in its core cable TV and broadband internet segments. As the company positions itself for the future, it expects theme parks, studios and streaming service Peacock to power growth while its traditional cable distribution businesses fade further.
The road ahead promises declining subscribers in cable and broadband, leading some analysts to question the long-term trajectory for Comcast. But with smart investments into new technologies and business lines, management aims to transform Comcast into a diversified media conglomerate poised for sustainable growth in the years ahead.
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