By Helen Coster
(Reuters) – Comcast Corp on Thursday reported first-quarter revenue that fell shy of Wall Street’s estimate, and shares dropped more than 4% as the company warned that the coronavirus will hurt advertising, theme parks and films in the second quarter.
“Looking ahead, we anticipate advertising revenue will materially weaken from the first quarter due to the continued postponement of sports as well as the shape of the economic recovery as it reopens from COVID-19 shutdowns,” Chief Financial Officer Michael Cavanagh said on the company’s earnings call.
Shares were down 3.9% to $37.47 in mid-afternoon trading, rebounding some from the morning $36.01 low. Comcast said it no longer expects to resume share repurchases in 2021.
In the first quarter, Comcast gained 477,000 broadband subscribers, beating analysts’ average estimate of 364,000 net additions, according to research firm FactSet. Revenue from the business grew 9.3% to $5 billion.
Video losses in the first quarter were steeper than expected as the trend toward “cord cutting” continued. Comcast lost 409,000 video customers, more than the 261,000 loss estimated by FactSet and more than the 149,000 video customers it lost in the fourth quarter.
Comcast reported first-quarter revenue of $26.61 billion, missing the Wall Street consensus estimate of $26.75 billion, according to IBES data from Refinitiv.
British pay-TV group Sky, which had early exposure to the coronavirus in Europe, generated first-quarter revenue of $4.52 billion, missing the average estimate of $4.81 billion.
For the first quarter, Comcast’s NBCUniversal segment, which includes NBC Entertainment and Universal Pictures, reported revenue of $7.73 billion, down 7% from a year earlier. Revenue at the filmed entertainment unit fell 22.5% from a year earlier; revenue at theme parks, which like movie theaters were shuttered for part of the quarter due to the coronavirus, fell 31.9%. Broadcast television revenue was up 8.8%.
In March Universal made the film “Trolls World Tour” available as a digital rental rather than postpone its April 10 theatrical opening, a decision that angered theater operators.
On Thursday NBC Universal Chief Executive Officer Jeff Shell addressed the film’s distribution strategy, saying he expects premium video on demand – as the model is called – to be a “complementary element” of theatrical distribution, not a replacement for it.
Net income attributable to Comcast fell to $2.15 billion, or 46 cents per share, from $3.55 billion, or 77 cents per share, a year earlier.
Excluding items, the company earned 71 cents per share, beating analysts’ estimate of 68 cents per share.
Reporting by Helen Coster in New York; Additional reporting by Neha Malara in Bengaluru; Editing by Leslie Adler, Jonathan Oatis and David Gregorio.