Cable giant Comcast (NASDAQ:CMCSA) posted strong quarterly results on Wednesday morning, and it may be a good sign for upcoming reports out of Disney (NYSE:DIS) and SeaWorld Entertainment (NYSE:SEAS) when they step up with fresh financials in two weeks.
Comcast's cable business continues to defy gravity by picking up more video customers than it loses. This obviously bodes well for Disney's cable properties, as more cable television accounts likely translate into more people paying for ESPN, Disney Channel, and other Disney-owned cable properties. Strength in premium television subscriptions also suggests that consumers are less interested in shaving costs by cord-cutting, something that should result in folks becoming more open to shelling out money for a theme-park outing.
However, the most important part of Comcast's report in the eyes of Disney and SeaWorld comes in its theme-park numbers. Comcast owns NBCUniversal, and with that media subsidiary, we get the Universal Studios theme parks.
Come through the turnstiles
Comcast's theme parks posted another period of year-over-year growth in the double digits. Reported revenue soared 60.6%, to $1.4 billion, with operating cash flow growing even faster. If that sounds too good to be true, you're right.
Comcast acquired Universal Studios Japan during the latter half of last year, padding results. However, if you back out that transaction, you still arrive at 16.1% in pro forma growth for its stateside parks. Operating cash flow on that adjusted basis also grew faster than the top line.
This is accelerating growth for Comcast's theme parks, where pro forma growth had climbed at a 10.2% clip through the first half of this year. You have to go back to the second quarter of 2015 -- more than a year -- to find the last time that Comcast's domestic theme parks posted higher revenue growth.
Universal has held up better than Disney and SeaWorld in recent quarters, but accelerating growth on the strength of stronger attendance and per-capita guest spending bode well for rival operators. Universal's two domestic resorts are reasonably close to Disney's two stateside resorts and SeaWorld's three most visited parks (SeaWorld Orlando, Busch Gardens Tampa, and SeaWorld San Diego).
Comcast's parks are the growth darlings. Universal is opening new rides, while Disney is in hard-hat mode. Universal doesn't have to shake off the notoriety that SeaWorld's brand has had to do in recent years. However, a trend is still a trend.
Following the new leader
SeaWorld has experienced a 2% decrease in revenue through the first half of the year, fueled by a 4.2% slide in attendance explained largely by a sharp slide in Latin American visitors to its Florida parks. Disney's theme parks have seen revenue grow at a 5% clip through the first six months of the calendar year, but it suffered a dip in Disney World attendance during the March quarter with a 4% slide across all of its domestic properties during the June quarter. If Universal has seen its pro forma revenue accelerate from 10.2% through the first half of this year to 16.1% in the September quarter, it could hint at Disney and SeaWorld turning things around for the summer quarter.
It may not seem that way to the naked eye. As someone who summers in Central Florida, I can pretty confidently say that SeaWorld and Disney World weren't as crowded as they were a year earlier. However, with all of the operators finding new revenue streams -- and both Disney and Comcast dramatically raising ticket prices since last year -- there's more to performance here than a head count of customers. If growth at Comcast's parks are accelerating to the point where it is Universal's strongest pro forma revenue growth in five quarters, it should translate into accelerating top-line growth at Disney and SeaWorld taking long overdue steps toward a turnaround.
We'll know soon enough. SeaWorld reports on Nov. 8, and Disney reports on Nov. 10.