Yahoo Finance Comcast stock drops after company reports surprise loss in broadband subscribers
Comcast (CMCSA) shares fell as much as 8% on Thursday, the biggest intraday decline since July 2022, after the company reported a surprise loss of broadband subscribers in the third quarter — despite reporting a beat on both the top and bottom lines.
Total domestic broadband customers dropped 18,000 compared to the year-ago period to hit just under 32.3 million total subscribers. Wall Street was anticipating a gain of about 3,600.
Management called out a "highly competitive broadband marketplace" as mobile providers like Verizon (VZ), T-Mobile (TMUS), and AT&T (T) enter the space with more flexible offerings to attract lower-income consumers. All three of those companies saw subscriber gains in the quarter.
Comcast CFO Jason Armstrong said the company is focused on balancing broadband subscriber growth with average revenue per user (ARPU) growth.
"During the quarter, we recalibrated by pulling back on some of our promotional offers targeting this segment to remain consistent with our strategy of competing aggressively but in a financially disciplined way," Armstrong said on the earnings call.
Domestic broadband revenue did increase 3.8% compared to Q3 2022, despite the loss in subscribers.
Still, Armstrong warned of more subscriber losses to come: "As we continue to manage this balance, we expect ARPU growth to remain strong and our primary driver of broadband revenue growth with somewhat higher subscriber losses expected in the fourth quarter compared to the 18,000 loss we just reported in the third quarter."
Coupled with broadband declines, the company lost 490,000 domestic video subscribers in the quarter as cord-cutting continues to hammer Comcast's traditional cable business.
Studios revenue also fell 23.6%, despite the success of Christopher Nolan's "Oppenheimer." Content licensing led the declines, down 25.4%, followed by theatrical revenue, which sank 25.1%.
"Content licensing revenue decreased primarily due to the timing of when content was made available by our television studios, including the impacts of the Writers Guild and Screen Actors Guild work stoppages in the current year period," the company said in the release.
Comcast blamed the fall in theatrical revenue on higher revenue from the prior year following the releases of "Minions: The Rise of Gru" and "Jurassic World: Dominion."
But it wasn't all doom and gloom as theme park revenue climbed 17.2% to reach $2.42 billion while the company's Peacock streaming service continued to improve its subscriber numbers.
Peacock added 4 million paid subscribers in the quarter to reach a total 28 million paying customers as the "Super Mario Bros. Movie" helped drive customers to the service.
The subscriber additions represented an 80% leap from a year ago while Peacock revenue increased 64% to $830 million after the streamer hiked prices for the first time in July.
Losses also improved with Peacock reporting an adjusted EBITDA loss of $565 million compared to a loss of $614 million in the prior-year period — ahead of Wall Street projections.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
