Given the current state of affairs around the globe, Comcast (NASDAQ:CMCS.A) turned in a decent report card for the first quarter of 2020. Per usual, new high-speed internet subscribers more than offset red ink elsewhere.

The situation with coronavirus didn't really get rolling until late in the first quarter, though, which means investors can safely assume most of the pain will be absorbed during the quarter that's currently under way. Nevertheless, even with COVID-19 and the ensuing lockdown wreaking havoc on the economy, the internet is more important than ever before. Thus, Comcast remains in good shape to be able to weather the storm.

The back of an internet modem with an ethernet cable plugged into it.

Image source: Getty Images.

Internet overwhelms cable cutting

Comcast reported consolidated revenue of $26.6 billion, a 0.9% decrease from the year prior. Adjusted net income and adjusted earnings per share fell 6.1% and 6.6%, respectively, to $3.27 billion and $0.71. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was down 4.9% year over year to $8.13 billion. Free cash flow fell 27.6% to $3.33 billion.  

NBC Universal and Sky were the main culprits. NBCU revenue and adjusted EBITDA were down 7.0% and 25.3%, respectively, due to lower sales from filmed entertainment and theme parks. With movie theaters around the globe shuttered and Universal Studios resorts on a temporary hiatus, there were no surprises there. The suspension of sporting events hurt broadcasting and cable as well, both at NBCU and Europe-based Sky. The latter experienced a 5.8% decline in sales and 16.9% decrease in adjusted EBITDA.  

Not great numbers for Comcast, and with the film and theme park segments still facing negligible sales until shelter-in-place orders are eased, the second-quarter report is going to be even uglier. No matter, though, because over half of Comcast's revenue and some 70% of adjusted EBITDA comes from the cable communications segment.

And while cable TV and landline phones are a serious headwind, high-speed internet and wireless phones (powered by Verizon's network) came through to save the day once more. High-speed internet in particular was a bright spot with the 477,000 net additions (excluding free accounts given away to help those in need) being the best in 12 years. High-speed web customers grew 5.5% as net additions were up 27% over the prior-year period.

Relationship Type

End of Q1 2020 Subscribers

Q1 2020 Net Additions (Losses)

Total high-speed internet (residential and business)

29.1 million

477,000

Total video (residential and business)

20.8 million

(409,000)

Total voice (residential and business)

11.2 million

(89,000)

Wireless lines

2.3 million

216,000

Total customers (including service bundles)

31.9 million

371,000

Data source: Comcast.  

No guidance, but the internet is a modern staple

Given the fluid situation surrounding coronavirus and the eventual easing of lockdowns, it's hard to say when business will "normalize" -- let alone what "normal" will look like in the future. In the meantime, Comcast continues to rely on its cable communications segment, which is easily picking up the tab for its flagging businesses. That includes Comcast not turning off anyone's service for failure to pay, as well as the offer for two free months of its "Internet Essentials" service for qualifying low-income households. Upstream traffic (data sent from a computer or device) on Comcast's network was up 33% during the first quarter, further demonstrating how important the web has become.  

As a result of faster internet connectivity, TV streaming becomes a possibility for households. That's where the Peacock TV streaming service comes into play, now live for existing Comcast customers as of mid-April. Peacock will debut nationwide in July (during the third quarter), but management commented that during the first three weeks since Peacock became available, it was exceeding its own internal forecasts for viewership

The last report leaves plenty of questions unanswered, but such is life at the moment. With high-speed internet carrying the burden and the worldwide web more important than ever, I have no plan to sell my Comcast shares anytime soon.