Comcast's (NASDAQ:CMCSA) first-quarter numbers were down, as might have been expected in the global coronavirus pandemic. But they weren't down nearly as much as one might have expected. Some areas of the media giant's business, in fact -- arguably the most important ones -- were up.

That was of little solace to shareholders, who sent the stock firmly lower on Thursday after CFO Michael Cavanagh warned that "advertising revenue will materially weaken from the first quarter" with the sports world still shut down and parts of the country just beginning to ease stay-at-home restrictions. The company's theme parks remain closed too, which isn't helping the bullish thesis.

But a closer look at Comcast's revenue breakdown might prompt investors to rethink their pessimism.

By the numbers

For the three-month stretch ending in March, Comcast turned $26.6 billion worth of revenue into operating net income of $5.8 billion. The former fell about 1% from the same period the year before, while the latter slumped by nearly 20% year over year. On a per-share basis, earnings fell from $0.76 to $0.71. That was more profit than analysts were expecting, according to numbers reported by Reuters, but the top line fell short of estimates.

Bar charts representing performance of different business divisions.

Image source: Getty Images.

The far more important question is, of course: Where did the company gain or lose ground?

Answer: Right where one would expect. Comcast's advertising businesses related to NBC and Sky shrank, as did its theme park revenue. With movie theaters shuttered, its Universal film arm is largely shuttered as well. It lost television and phone (landline) customers too, although both of those setbacks were already in motion. Its one bright spot was broadband, but boy, what a bright spot that breadwinner was.

Winners and losers

The table tells the tale. Its high-speed internet arm -- which accounts for about one-fifth of Comcast's total revenue -- grew more than 9%, boosted by strong subscriber growth. Its cable television arm lost subscribers, but by extracting more revenue from the customers it's keeping, Comcast managed to drive about the same sort of linear TV revenue it generated during the first quarter of last year. It's also doing more work for businesses, as opposed to consumers.

 Comcast Business Division Q1 2018 Revenue Q1 2019 Revenue Q1 2020 Revenue Change (YOY) 
High-speed internet $4,157 $4,577 $5,001 9.3%
Cable television $5,659 $5,628 $5,632 0.1%
Cable services for businesses $1,726 $1,891 $2,043 8%
Voice & all other cable communication  $1,773 $1,771 $1,799 1.6%
Cable TV networks $3,157 $2,868 $2,859 (0.3%)
Broadcast television $3,497 $2,467 $2,684 8.8%
Filmed entertainment $1,647 $1,768 $1,370 (22.5%)
Theme Parks  $1,281 $1,276 $869 (31.9%)
Sky $5,049 $4,797 $4,517 (5.8%)
Total consolidated revenue  $27,762 $26,859 $26,609 (0.9%)

Data source: Comcast Investor Relations/Q1-2020 Report. All dollar figures are in millions.

The soft spots are pretty clear as well, and unsurprising. Its filmed entertainment unit has fewer ways to steer consumers to its shows. Of course, with ad budgets drying up while advertisers work to figure out if a recession looms, last quarter's advertising slump comes as no surprise for Comcast or any other cable name.

Now take a look at Comcast's biggest businesses. In order, that's cable television service, high-speed internet, Sky (mostly its core direct-to-consumer business), cable networks, broadcast television, and cable/internet service for businesses. Together, they account for three-fourths of the company's top line, and with the exception of Sky and its cable networks business, those all grew last quarter despite the COVID-19 outbreak. Moreover, those two divisional contractions were a modest 5.8% and 0.6%.

That's not to suggest investors should dismiss the current and prospective effects that shrinking advertising budgets will have on Comcast's business. It is to suggest, however, with its trailing-12-month price-to-earnings (P/E) ratio of just above 13, that investors may be overestimating that plausible effect.

Internet customers are the key

This is especially true given one area where Comcast is doing exceedingly well. That's on the broadband front, where it now serves 26.9 million consumers, and 2.2 million businesses. That's 477,000 more high-speed internet users than were on board as of the end of 2019, almost offsetting the 409,000 cable and 89,000 voice (landline) customers the company lost during Q1. It also added 216,000 wireless phone customers last quarter.

Historical subscriber totals, by business, for Comcast.

Data source: Comcast investor relations trending schedule. Chart by author.

Of all the types of customers to add, broadband users are the ideal ones. It's a relationship that can be readily leveraged to sell other revenue-bearing services.

Case in point: The impending universal launch of Comcast's streaming service, Peacock. Comcast customers who watch the free version of Peacock still add incremental ad revenue, even if they're just broadband subscribers. Comcast's wireless phone service is also offered only to existing internet customers, making the bundle more marketable by offering a low-cost mobile service that leverages the company's existing internet infrastructure. Indeed, customers of any of Comcast's services may ultimately become part of a consumer base that supports the company's new wide-scale e-commerce initiatives.

Looking ahead

Comcast's top and bottom lines will undoubtedly suffer for the foreseeable future. Although the spread of COVID-19 appears to be slowing and a return to normalcy is on the horizon, advertisers may prove especially cautious until they're sure the global economy is on a firm footing.

The company's biggest and most important businesses remain well defended, though, and are relatively immune to the effects of the coronavirus.