The COVID-19 pandemic is lifting parts of Comcast's (NASDAQ:CMCSA) business, but its negative effects are far outweighing the gains. The cable and entertainment giant recently announced first-quarter earnings results for the quarter ended March 31, which includes over a month of squeezed results in international markets and two weeks of the social distancing measures that closed most theme parks and movie theaters in the U.S.

The overall result was a 7% drop in adjusted earnings and an over 25% hit to free cash flow, with potentially worse results on the way in the fiscal second quarter.

With that bigger picture in mind, let's look at the latest numbers.

Man, woman, and two children watching TV together.

Image source: Getty Images.

Cable and communication gains

The cable and communications side of the business had an excellent first-quarter outing. Comcast achieved a record 371,000 new cable customer signups in the period, while its high-speed internet segment notched its best growth in over a decade. These wins helped push revenue up 4.5% in the division, to $14.9 billion.

Earnings expanded at a faster rate, pushing adjusted profitability up to 41% of sales from 40% a year ago. "[W]e'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," CEO Brian Roberts said in a press release.

The bad news

Comcast's other segments fared much worse through the start of the pandemic. NBC Universal started to feel the pinch from canceled sports broadcasts, which pulled advertising spending lower. Yet the bigger impacts showed up in the film and theme park segments, where sales were down 23% and 32%, respectively. Widespread park and movie theater closures pressured those businesses and sent profits slumping.

Adjusted earnings fell 71% in the film segment and collapsed by 85% at the theme parks. Overall, the NBC Universal unit saw operating earnings decline by $590 million to $1.7 billion. Universal Studios Japan closed in late February, and the Florida resorts have been shut down since mid-March.

A tough second quarter ahead

The financial drags surely has worsened in the second quarter as the period of closures for movie theaters and theme parks has already included the first full month of Q2. Without venturing a detailed projection, Comcast warned investors to brace for some sharp sales and profit declines ahead. "We expect the impacts of COVID-19 to increase in significance in the second quarter ... and to have a material adverse impact over the near-to-medium term," management explained.

Executives sounded an optimistic tone that business will soon start rebounding toward normal once the virus threat subsides, as it has in places like China. They highlighted some ways that the crisis is strengthening the business, too, including by accelerating direct-to-consumer content distribution through services like Peacock and Flex.

"This is a moment in time," Roberts said, "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 grow and succeed."

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