MUMBAI: Broadcasting and cable television company Comcast Corporation has reported results for the quarter ended March 31, 2020. While broadcast television revenue increased 8.8 per cent to $2.7 billion in the first quarter of 2020, distribution revenue and ad revenue decreased 1.5 per cent and 2.2 per cent, respectively.
Broadcast television
Growth in broadcast television revenue reflects increases in content licensing revenue and distribution and other revenue. Content licensing revenue increased 31.3 per cent due to the timing of content provided under licensing agreements. Distribution and other revenue increased 6.9 per cent, due to higher retransmission consent fees. Advertising revenue was consistent with the prior year period, reflecting higher pricing and local political advertising, offset by audience ratings declines and reduced advertiser spending due to Covid2019.
Adjusted EBITDA increased 29.6 per cent to $501 million in the first quarter of 2020, reflecting higher revenue, partially offset by an increase in operating costs and expenses. The increase in operating costs and expenses was primarily due to an increase in programming and production costs, which was partially offset by the favorable impact of adopting updated accounting guidance.
Cable networks
While it lost 388,000 residential video subscribers in the first quarter, cable networks revenue of $2.9 billion was consistent with the prior year period, reflecting decreases in distribution revenue and advertising revenue, offset by an increase in content licensing and other revenue.
Distribution revenue decreased 1.5 per cent, reflecting a decline in subscribers, partially offset by contractual rate increases and the timing of contract renewals. Advertising revenue decreased 2.2 per cent, reflecting audience ratings declines and reduced advertiser spending resulting from the postponement of sports events due to Covid2019, partially offset by higher pricing.
The Covid209 pandemic, it seems, has not eroded its other revenue streams. Content licensing and other revenue increased 13 per cent due to the timing of content provided under licensing agreements. Adjusted EBITDA decreased 1.2 per cent to $1.2 billion in the first quarter of 2020, reflecting flat revenue, and flat operating expenses, as higher other operating and administrative costs were offset by lower programming and production costs. The decline in programming and production costs was primarily due to decreases in the recognition of sports programming costs as a result of the postponement of sports events due to Covid2019.
Filmed entertainment
Filmed Entertainment revenue decreased 22.5 per cent to $1.4 billion in the first quarter of 2020, reflecting decreases in theatrical revenue, content licensing revenue, home entertainment revenue and other revenue. Theatrical revenue decreased 28.8 per cent, reflecting a difficult comparison to the success of films in the first quarter of 2019.
“Society is being challenged like never before in our lifetime, and I couldn’t be prouder of our company, our employees, and our leadership team across Comcast Cable, NBCUniversal, and Sky. Now more than ever the world needs to stay connected, and we’re extremely pleased that our investments in our network continue to pay off as we are handling significant increases in traffic and meeting our customers’ needs," said Brian L Roberts, chairman and chief executive officer of Comcast Corporation.
“While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate. We are distributing our content in new ways, as evidenced by the recent launch of Peacock on X1 and Flex. We've also taken decisive action, having moved over 95 per cent of our US call-centre employees to work from home and putting in place new procedures that have allowed more than 15,000 construction workers to safely come back to work to build our theme park in Beijing. All the divisions of our company are in constant communication, and the level of collaboration has been extraordinary. We have a strong balance sheet, terrific portfolio of assets, and a world-class management team. This is a moment in time; and when it passes, I am very confident that the decisions we are making now will enable us to emerge from this crisis as a healthy, strong company that is well positioned to continue to grow and succeed,” he said.
Theme parks
Theme Parks revenue decreased 31.9 per cent to $869 million in the first quarter of 2020, primarily due to the closures of Universal Studios Japan in late February and Universal Orlando Resort and Universal Studios Hollywood in mid-March as a result of COVID-19. Adjusted EBITDA decreased 84.7 per cent to $76 million in the first quarter of 2020, reflecting lower revenue and higher operating costs. The increase in operating costs was primarily due to increases in employee-related costs and pre-opening costs associated with the Universal Beijing Resort and Super Nintendo WorldTM in Universal Studios Japan, partially offset by lower park operation costs due to the park closures.
Consolidated results
Revenue for the first quarter of 2020 decreased 0.9 per cent to $26.6 billion. Net Income Attributable to Comcast decreased 39.6 per cent to $2.1 billion. Adjusted Net Income decreased 6.1 per cent to $3.3 billion. Adjusted EBITDA decreased 4.9 per cent to $8.1 billion.
Earnings per Share (EPS) for the first quarter was $0.46, a decrease of 40.3 per cent compared to the first quarter of 2019. Adjusted EPS decreased 6.6 per cent to $0.71.
Capital Expenditures decreased 10.1 per cent to $1.9 billion in the first quarter of 2020. Cable Communications’ capital expenditures decreased 6.9 per cent to $1.3 billion in the first quarter of 2020. NBCUniversal’s capital expenditures decreased 16.7 per cent to $377 million. Sky's capital expenditures decreased 24.1 per cent to $197 million. Net Cash Provided by Operating Activities was $5.8 billion in the first quarter of 2020. Free Cash Flow was $3.3 billion.
Dividends paid during the first quarter of 2020 totalled $977 million.
