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3 Numbers from Comcast's Q1 That Investors Need to Know

By James Brumley - Apr 30, 2021 at 9:50AM

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The company is growing the most where it needs to the most, offsetting its high-profile headwinds.

Kudos to Comcast (CMCSA 2.68%), and congratulations to shareholders. The company handily topped its fiscal 2021 first-quarter revenue and earnings estimates of $26.7 billion and $0.59 per share, respectively, reporting sales of $27.2 billion and a per-share profit of $0.76. And share prices jumped 4% in response to Thursday morning's news. The stock's still below its March peak, but it continues to justify its 75% run-up from last March's low.

There's more to this highly diversified media company than one quarter's top and bottom lines, of course. Here's a closer look at three Q1 data nuggets that speak volumes about where Comcast is going and why it remains a buy.

1. $5.6 billion in broadband revenue

It's no secret that the cable television business is dying while the broadband (high-speed internet) market is growing. Comcast, however, is officially at the tipping point. Its first-quarter broadband revenue grew 12% to $5.6 billion, finally catching up with its challenged cable television business.

A hand holds up three fingers with a television in the background

Image source: Getty Images.

Comcast's cable service Xfinity lost another 491,000 cable customers last quarter, producing revenue of $5.62 billion, down slightly from the year-ago comp of $5.63 billion. Given both businesses' current trajectories, broadband will not only be bigger than cable TV a quarter from now, but it will then be Comcast's single biggest business segment.

That's not to suggest the company is simply going to give up altogether on cable television here -- it's still an important piece of the revenue mix. But in this light, the apparent disinterest in winning over and then retaining cable television customers certainly makes sense. High-speed internet is a considerably more profitable business than cable television is, and increasingly so.

2. 42 million Peacock signups

As of its latest headcount, Comcast says 42 million people have signed up for its nascent on-demand streaming service Peacock. That's up from 33 million a quarter earlier.

Comcast doesn't offer other key Peacock metrics in its quarterly reports, like revenue or EBITDA. It also doesn't disclose Peacock's engagement statistics, like the number of consumers regularly using the on-demand service, or how much they're watching when they do. Nevertheless, another 9 million people expressed some degree of new interest in Peacock over the course of the prior three months, with some prompted by access to new WWE programming and reruns of the hit sitcom The Office.

Macquarie Research's analysts expect Peacock's revenue to reach just a little less than $2 billion by 2024 when its user base is expected to reach just over 51 million people. Given the growth trend and the known fact that Peacock generated $118 million in revenue in 2020 just after launching mid-year though, Macquarie may be underestimating the ad-supported video streaming brand.

Stacked wooden blocks, in descending order from 3 to 2 to 1.

Image source: Getty Images.

3. Sky's revenue grows nearly 11%

Finally, many investors may not realize it, but Comcast also owns U.K.-based cable and broadband brand Sky. The division also licenses content and sells advertising, for the record, but these account for less than one-fifth of its total business.

It's no small side project either. At just a little less than $5 billion worth of revenue last quarter, Sky is one of the company's bigger divisions, easily topping its film revenue and at least matching its TV media business. Comcast drove a total of $27.2 billion worth of revenue last quarter, for perspective.

That's not the curious part, however. Most noteworthy about Sky's quarter is the year-over-year revenue growth of 10.6%, mostly driven by growth in the sheer number of customers on board. It's the third straight quarter Sky has produced year-over-year revenue growth.

Bottom line

There's more to the story, obviously. Wireless phone service, theme parks, and a major television network are part of the mix.

But there's not a whole lot more to the relevant story right now. The aforementioned businesses are either the company's biggest ones, or its most important growth engines, or a combination of both. Despite clear and present challenges on the traditional television front, Comcast is responding the right way in a big way.

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