Comcast posts surprise broadband customer loss, results top estimates

By Helen Coster and Samrhitha A

NEW YORK (Reuters) -Comcast forecast higher broadband losses after the number of customers unexpectedly declined in the third quarter amid tough competition, overshadowing the strong performance of its streaming and parks businesses.

The media giant lost 18,000 broadband customers in the quarter, against estimates for a gain of 3,600 customers, according to FactSet. The company has faced pressure from wireless carriers such as Verizon (NYSE:) and T-Mobile, which offer broadband services that target lower-income customers.

Comcast (NASDAQ:)’s shares fell more than 6% in late morning trading.

In a call with investors, Comcast said it expects “somewhat higher” broadband subscriber losses in the fourth quarter. That would be at least triple the loss of 6,000 customers analysts had forecast prior to the call, according to FactSet. Comcast has over 32.3 million broadband customers.

“Stiff competition across broadband, which saw customer losses, and wireless mobile is causing concern because even though revenues are up, that cannot last for long if customer acquisition trends the wrong way,” said Michael Schulman, chief investment officer at Running Point Capital.

Revenue rose 0.9% to $30.12 billion in the third quarter, beating analysts’ estimates of $29.68 billion, according to LSEG data.

In its third set of results under a new reporting structure that includes NBCUniversal in the content and experiences segment, Comcast reported a 0.8% increase in revenue in the unit to $10.56 billion.

Advertising revenue in content and experiences fell 8.4% from the same quarter the previous year.

Revenue at the company’s Peacock streaming service rose 64% from a year earlier. Paid subscribers increased by 4 million in the third quarter, to 28 million.

Adjusted losses from Peacock narrowed in the quarter, to $565 million, due partly to price hikes. On Thursday, Comcast President Mike Cavanagh said the company expects Peacock adjusted losses to peak at $2.8 billion in 2023, less than the $3 billion it had previously forecast.

Theme parks revenue climbed 17.2%, thanks to pent-up demand following the COVID-19 pandemic.

Despite the box office success of “Oppenheimer,” studios revenue fell by 23.6% in the quarter from the same quarter a year ago, which included the hits “Jurassic World: Dominion” and “Minions: The Rise of Gru.”

Adjusted profit came in at $1.08 per share, beating expectations of 95 cents.