Comcast Broadband The 'Centerpiece' Of Cable Giant's Portfolio, Execs Say
Comcast's strong momentum in broadband and business services has driven the cable giant to another profitable quarter, Comcast Chairman and CEO Brian Roberts says during the its first-quarter 2019 earnings call Thursday.
Comcast Chairman and CEO Brian Roberts told investors during the company's first-quarter 2019 earnings call Thursday that even with consistently increasing broadband revenue anchoring the cable giant's solid revenue once again, there is still "lots of runway ahead" for its core connectivity business.
"We've pivoted the business towards our most important and differentiated product, our industry-leading broadband service, which forms the foundation of our relationship with residential and business customers," Roberts said. "With our consistent investment in our network, we believe we will continue to exceed customer expectations. … We're off to a terrific start in 2019, highlighted in particular by momentum in broadband and business services."
Comcast's Cable Communications segment posted the highest quarterly earnings before interest, tax, depreciation and amortization (EBITDA) growth in over a decade, Roberts said. Revenue for the business unit, which includes high-speed internet, voice, video, wireless and business services, rose 4.2 percent during the first quarter, reaching $14.28 billion, up from $13.70 billion in the first quarter of 2018.
Comcast's business services revenue continued to post strong growth, jumping 9.5 percent to $1.89 billion in the first quarter compared with $1.73 billion in the same quarter a year ago.
While the biggest driver of cable growth came from residential customers during first-quarter 2019, customer relationships grew 5.4 percent in the business services segment and revenue per business customer increased 3.8 percent during the quarter. That growth reflects a demand for Comcast's core connectivity across small, medium and enterprise businesses, but it also signals that Comcast is deepening its relationships with businesses as these customers take advantage of the cable giant's value-added services, such as wireless backup and SD-WAN, said Michael Cavanagh, Comcast's senior executive vice president and CFO.
"Broadband is the centerpiece of our packaging. … We drove 300,000 total customer net additions and broadband is the driver behind that," Cavanagh said, adding that Comcast is also seeing an "encouraging uptake" of its complementary network services.
High-speed internet rose 4.2 percent to $4.58 billion, up from $4.16 billion a year ago. For first-quarter 2019, Comcast added a total of 351,000 net-new high-speed internet customers, with residential revenue Increasing 10.1 percent and business services revenue increasing 9.5 percent during the quarter.
Voice revenue, on the other hand, continued its decline, falling to $990 million in first-quarter 2019 from $1.01 billion during the first quarter of last year.
Comcast's Cable Communications results now include numbers for Xfinity Mobile, its wireless service that was introduced in 2017. Xfinity Mobile gained 170,000 net additions during first-quarter 2019 with revenue of $252 million, up from $185 million in the first quarter last year. Cavanagh said that Xfinity Mobile's pay-by-the-gigabyte plan is the most popular option with customers today.
In an effort to diversify its portfolio, Philadelphia-based Comcast finalized its acquisition of British pay-TV provider Sky at the end of 2018 following an extensive bidding war with 21st Century Fox. Comcast ultimately won after bidding $39 billion for the European content giant. Europe's largest content provider, which joined Comcast's balance sheet in October, posted revenue of $4.80 billion during the first quarter of 2019 compared with $5.05 billion in the year-ago quarter. Comcast said its Sky business unit gained 112,000 customers in first-quarter 2019.
Revenue for Comcast's first quarter increased to $26.86 billion, up 17.9 percent from $22.80 billion in the year-ago quarter. Net income in the quarter was $3.55 billion, rising 14 percent from last quarter's ending balance of $3.12 billion. The cable giant posted adjusted earnings per share of 76 cents, up 17.6 percent compared with 68 cents per share for the first quarter of last year.
Comcast beat Wall Street's expectations of earnings of 67 cents but missed on expected revenues of $27.21 billion for the period ended March 31.