Peacock Narrows Q4 Loss to $372 Million, ‘Wicked’ Boosts Comcast’s Studios Profit by 85%

Comcast beat Wall Street expectations for its fourth quarter of 2024 as Peacock continued to narrow its losses and “Wicked” helped the studios business defy gravity with an 85% increase in profit to $569 million.

But shares of the media conglomerate fell 4% in pre-market trading on Thursday after it shed 139,000 domestic broadband customers. Comcast Cable president and CEO Dave Watson previously warned in December that the company would lose just over 100,000 broadband subscribers, including around 10,000 from weather-related disruptions from Hurricanes Milton and Helene.

Here are the top-line results:

Net income: $4.78 billion, up 46.6% year over year. On an adjusted basis, net income grew 8.3% year over year to $3.7 billion. The figure included a $1.9 billion income tax benefit due to an internal corporate reorganization, which it expects to receive in 2025.

Earnings per share: $1.24 per share, up 54% year over year. On an adjusted basis, EPS came in at 96 cents per share, up 13.9% year over year, compared to 88 cents per share expected by analysts surveyed by Zacks Investment Research.

Revenue: $31.92 billion, up 2.1% year over year, compared to $31.63 billion expected by Zacks.

Adjusted EBITDA: $8.8 billion, up 9.9% year over year. The figure included $441 million of severance in the quarter.

Net cash from operating activities for the quarter grew 36.5% to $8 billion, while free cash flow surged 90.9% to 3.2 billion.

The latest quarterly results come as Comcast is preparing to spin off its cable network portfolio into a publicly-traded, standalone company. The move is expected to be completed by the end of the year and will be tax-free to Comcast’s shareholders.

The entity, currently dubbed SpinCo, will house USA Network, CNBC, MSNBC, Oxygen, E!, SYFY and Golf Channel and digital assets Fandango, Rotten Tomatoes, GolfNow and SportsEngine, reaching 70 million U.S. households and generate $7 billion in annual revenue. It will be led by Mark Lazarus as CEO and Anand Kini as CFO and chief operating officer.

“As a well capitalized, independent company with a focused management team and strong portfolio of news, sports and genre based entertainment, SpinCo will be well positioned to lead in the changing cable and digital media landscape,” Comcast president Mike Cavanagh told analysts on Thursday.

He added it would be a “positive catalyst” for NBCUniversal, which will continue to be one of the largest media companies in the world with nearly $40 billion in annual revenue. It will be led by NBCUniversal Entertainment and Studios chairman Donna Langley and NBCUniversal Media Group chairman Matt Strauss.

Bravo, which is known for reality TV hits such as “The Real Housewives” and is viewed as a primary Peacock “feeder,” will stay with Comcast. Also staying are the streaming service and the NBC broadcast network, NBC Sports, Telemundo, NBCU’s local stations and the company’s film and television studios. Universal Kids is set to shutter in March.

Peacock Boosts Media Division Profit By 175% as Streamer’s Losses Continue to Narrow

Peacock saw revenue grow 28% to $1.3 billion, compared to $1 billion in the prior year period. But the streaming service remains unprofitable, posting a loss of $372 million for the quarter, down from a loss of $825 million in the prior year period. Total paid subscribers remained unchanged at 36 million.

Overall, the media division posted a 3.5% increase in revenue to $7.2 billion and 175.2% increase in profit to $298 million. The increase in profit was due to higher revenue and consistent operating expenses, while the revenue increase was due to a 5% bump in domestic distribution revenue to $2.89 billion, primarily due to higher revenue at Peacock.

Domestic advertising grew 0.4% to $2.6 billion, primarily due to the revenue increase in Peacock and offset by lower revenue at its networks, while international networks revenue grew 4.1% to $1.09 billion due to an increase in revenue associated with the distribution of sports networks.

Chief financial officer Jason Armstrong said Peacock would continue to make improvements towards profitability in 2025.

Studios Business Defies Gravity with 85% Jump in Profit

The Studios business was also a bright spot, with profits soaring 85% to $569 million and revenue growing 6.7% to $3.7 billion thanks to the successful theatrical performances of “Wicked,” “The Wild Robot,” “Kung Fu Panda 4,” and “Despicable Me 4.” Theatrical revenue grew 50% to $515 million, while content licensing revenue grew 0.3% to $2.38 billion.

Higher licensing revenue at its TV studios was offset by lower licensing revenue at its film studios, primarily due to the timing of when content was made available under licensing agreements, including the impacts of the work stoppages in the prior year period.

“We are excited about the 2025 slate, which includes How to Train Your Dragon, Jurassic World rebirth and Wicked For Good, just to name a few,” Armstrong said. “While, we expect another strong theatrical and PVOD run, studio EBITDA growth will be impacted in 2025 by higher marketing expenses tied to a larger film slate and lower carryover from prior years, given the writers and actors strikes in 2023.”

Comcast Continues to Bleed Broadband, Pay TV Subscribers

Comcast’s Connectivity & Platforms unit was hit hard in the fourth quarter, with the segment shedding 139,000 domestic broadband customers for a total of 31.84 million and 311,000 video customers for a total of 12.5 million. But wireless was a bright spot, with 307,000 additions during the quarter for a total of 7.8 million.

Total revenue for the segment fell 0.3% to $20.46 billion, while profit grew 3.5% to $7.8 billion. Residential connectivity revenue grew 5.2% to $9.07 billion. The figure includes domestic broadband revenue growth of 2% to $6.5 billion, domestic wireless revenue growth of 16.6% to $1.2 billion and international connectivity revenue of 9.8% to 1.35 billion.

Video revenue declined 5.8% to $6.5 billion driven by continued cord-cutting, partially offset by an overall increase in average rates. Advertising revenue grew 4.4% to $1.16 billion, primarily due to higher domestic political advertising that was partially offset by lower domestic nonpolitical and international advertising. Excluding political advertising, advertising revenue fell abut 6%.

Theme Parks Drag With Flat Revenue Growth, 3.9% Decline in Profit

The theme parks business was also a drag on Comcast’s earnings, with profit falling 3.9% to 838 million and flat revenue growth of 0.1% to $2.37 billion.

The domestic theme parks saw lower revenue, driven driven by lower guest attendance, offset by higher revenue at international theme parks. The segment’s results included around $35 million of pre-opening costs in the quarter for the Epic Universe theme park in Orlando, which is scheduled to open on May 22.

More to come…

The post Peacock Narrows Q4 Loss to $372 Million, ‘Wicked’ Boosts Comcast’s Studios Profit by 85% appeared first on TheWrap.