By Harshita Mary Varghese
July 23 (Reuters) – Comcast’s Peacock streaming service reported its first quarterly profit on Thursday, as the soccer World Cup and the hit reality show “Love Island USA” attracted more subscribers.
The $189 million pre-tax profit marks a major win for the streaming service. The late entrant in 2020 had to spend billions of dollars on content to gain a foothold in a market dominated by Netflix, Disney+ and Amazon Prime Video.
The service added 2 million paid subscribers in the April-June quarter, nearly four times the figure expected by analysts who were polled by Visible Alpha. The additions took its total to 48 million. Its sales rose 54% to $1.90 billion, also ahead of estimates.
The service streamed Telemundo’s Spanish-language coverage of FIFA World Cup matches, whose viewership benefited from prime-time kickoffs in the United States.
A strong summer movie lineup, including unexpected box-office hit “Obsession” and animated film “The Super Mario Galaxy Movie,” helped the company’s studio revenue grow 25% to $3 billion.
The result is also a boost for Comcast’s planned spinoff of NBCUniversal and Sky, which will leave the company with a connectivity business facing tough competition from fixed-wireless offerings and rivals aggressively expanding their fiber networks.
Its broadband customers decreased by 167,000 in the second quarter, more than the 165,300 losses estimated by FactSet.
Improving customer retention might require Comcast to offer more incentives “that could eat away again at that future profitability,” said Brian Mulberry, chief market strategist at Zacks Investment Management, which owns Comcast stock.
Shares of the company were down 1.7%.
THEME PARKS FACE SOFTER DEMAND
Theme parks emerged as a weak spot for Comcast, with executives saying the operating environment softened more than expected.
Attendance in the broader Orlando market weakened from June and the slowdown has continued into the current quarter, which the company attributed to higher fuel prices and weaker consumer sentiment.
The parks in Osaka and Beijing also continued to face headwinds from China-related travel restrictions and a challenging macroeconomic environment.
Pre-tax profit from the unit fell 5.1%, with revenue of $2.41 billion slightly below estimates.
Total revenue of $29.94 billion and adjusted profit of $1.04 per share beat estimates, according to data compiled by LSEG.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Leroy Leo and Joyjeet Das)
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