On July 23, 2024, Comcast Corp (CMCSA, Financial) released its 8-K filing for the second quarter of 2024. The company reported mixed results, with revenue falling short of analyst estimates but earnings per share (EPS) exceeding expectations.
Company Overview
Comcast Corp (CMCSA, Financial) is a global media and technology company. It operates through three primary segments: Connectivity & Platforms, Content & Experiences, and Sky. The core cable business provides television, internet access, and phone services to 63 million U.S. homes and businesses. Comcast also owns NBCUniversal, which includes cable networks like CNBC and MSNBC, the NBC network, the Peacock streaming platform, Universal Studios, and several theme parks. Sky, acquired in 2018, is a leading television provider in the UK, Italy, Germany, and Austria.
Performance and Challenges
For the second quarter of 2024, Comcast reported a revenue of $29.688 billion, a 2.7% decrease from the same period last year, missing the analyst estimate of $30.020 billion. Net income attributable to Comcast also declined by 7.5% to $3.929 billion. However, adjusted net income remained stable at $4.735 billion, a slight increase of 0.2% year-over-year.
Despite the revenue shortfall, Comcast's adjusted EPS increased by 7.0% to $1.21, surpassing the analyst estimate of $1.04. The company also faced challenges in its Studios and Theme Parks segments, which saw declines due to difficult comparisons to the previous year.
Financial Achievements
Comcast achieved several financial milestones in Q2 2024. The company returned $3.4 billion to shareholders through dividends and share repurchases. Additionally, the Connectivity & Platforms segment saw a 1.6% increase in adjusted EBITDA to $8.5 billion, with an adjusted EBITDA margin reaching a record-high of 41.9%.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Revenue | $29.688 billion | $30.513 billion | (2.7%) |
| Net Income | $3.929 billion | $4.248 billion | (7.5%) |
| Adjusted Net Income | $4.735 billion | $4.723 billion | 0.2% |
| Adjusted EBITDA | $10.171 billion | $10.244 billion | (0.7%) |
| EPS | $1.00 | $1.02 | (1.3%) |
| Adjusted EPS | $1.21 | $1.13 | 7.0% |
| Net Cash Provided by Operating Activities | $4.724 billion | $7.197 billion | (34.4%) |
| Free Cash Flow | $1.338 billion | $3.421 billion | (60.9%) |
Segment Performance
The Connectivity & Platforms segment reported a slight revenue decrease of 0.6% to $20.245 billion. However, adjusted EBITDA for this segment increased by 1.6% to $8.483 billion, driven by growth in both Residential and Business Services Connectivity.
In the Content & Experiences segment, revenue decreased due to lower performance in Studios and Theme Parks. Media revenue, however, increased, driven by improved performance at Peacock, which saw a 38% increase in paid subscribers to 33 million and a 28% increase in revenue to $1.0 billion.
Commentary
"We grew Adjusted EPS high single digits and continued to invest aggressively in our businesses while returning $3.4 billion to shareholders," said Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation. "Broadband ARPU increased by 3.6% and we delivered 6% revenue growth in our connectivity businesses, while expanding our Adjusted EBITDA margin across Connectivity & Platforms to a record-high 41.9%."
Analysis
Comcast Corp (CMCSA, Financial) demonstrated resilience in its Q2 2024 earnings despite facing revenue challenges. The company's ability to increase adjusted EPS and maintain stable adjusted net income highlights its operational efficiency and strategic investments. The growth in the Connectivity & Platforms segment and the strong performance of Peacock are positive indicators for future growth. However, the declines in Studios and Theme Parks underscore the need for continued innovation and adaptation in these areas.
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Explore the complete 8-K earnings release (here) from Comcast Corp for further details.
