Comcast Showcases a Beat With Solid Internet, Mobile Growth

Comcast (CMCSA -0.37%) released better-than-expected second-quarter 2019 results on Thursday morning. The media conglomerate highlighted solid growth from its high-speed internet and mobile businesses, but also detailed the continuing impact of cord-cutters via its steadily shrinking pay-TV subscriber base.

With shares down modestly in Thursday's afternoon trading as of this writing, let's take a closer look how Comcast ended the first half.

Comcast's results: The raw numbers

Data source: Comcast.

IMAGE SOURCE: GETTY IMAGES.

What happened with Comcast this quarter?

• Revenue growth was largely driven by Comcast's acquisitions of Sky last year.
• On an adjusted (non-GAAP) basis, which excludes items like stock-based compensation and acquisition costs, earnings per share grew 13% year over year to $0.78.
• Though we don't typically pay close attention to Wall Street's demands, these results compared favorably to consensus estimates for adjusted earnings of $0.75 per share on revenue of $26.86 billion.
• Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 17.5% to roughly $8.72 billion.
• Within the cable communications segment:
  • Adjusted EBITDA rose 7.4%, to $5.85 billion, helped by 3.4% growth in customer relationships to 30.9 million, and a 3.8% increase in adjusted EBITDA per customer relationship.
  • The segment added a net of 152,000 customers this quarter, including 209,000 net additions for high-speed internet, 224,000 net losses of video customers, 65,000 voice customer net losses, 23,000 security and automation additions, and 181,000 wireless line additions.
  • High-speed internet residential revenue grew 9.4%, and business services revenue climbed 9.8%.
• NBC Universal revenue declined 0.8% to $8.21 billion, as a nearly 15% drop in filmed entertainment revenue (to $1.46 billion) more than offset modest growth from cable networks (up 2.5% to $2.95 billion), broadcast TV (up 0.5% to $2.4 billion), and theme parks (up 7.5% to $1.46 billion).
• NBCUniversal consolidated adjusted EBITDA grew 8.1%, to $2.32 billion.
• Sky adjusted EBITDA climbed 13.4% on a pro forma basis, to $772 million. Sky segment customer relationships grew 4.4% to 24 million, including 304,000 net additions this quarter.

What management had to say

Comcast Chairman and CEO Brian Roberts stated:

I am very pleased with our terrific second quarter results and the continued, successful execution of our strategy. Each of our businesses demonstrated healthy growth in adjusted EBITDA, contributing to a double-digit increase in adjusted earnings per share. Our company's consistent, profitable growth is fueled by our leading scale in direct customer relationships and premier content. We now have nearly 55 million high-value direct customer relationships, including the 456,000 net additions in the second quarter, and a vast library of intellectual property and new productions that are extremely popular across generations and geographies. Our teams throughout the company continue to collaborate to make themselves and each other even stronger, and I'm excited about our growth opportunities ahead.

Looking forward

During the subsequent conference call, NBCUniversal CEO Steve Burke confirmed the company is preparing to launch its new ad-supported streaming video service next April -- a move that could serve to effectively offset losses endured through its waning pay-TV offerings.

With shares already up nearly 30% so far in 2019, perhaps it's no surprise this modest beat spurred a muted response from the market today. But it's apparent Comcast is working hard to position itself for sustained, profitable growth in today's fast-changing media landscape.