Comcast’s profit slumps 40% in Q1 due to Coronavirus restrictions

Comcast Corp. (NASDAQ: CMCSA) released its quarterly financial results on Thursday that posted a dramatic 40% decline in the company’s profit in the first quarter. Despite the upbeat performance from its cable and broadband segments, the company failed to offset a broader decline in its theme park and film divisions in Q1. Comcast also warned of a more pronounced COVID-19 impact on its financial performance in the second quarter.

Following the release of the dovish earnings report, Comcast was reported around 1.8% down in premarket trading on Thursday.

Comcast’s Q1 financial results versus experts’ forecasts

According to Refinitiv, experts had forecast the company to print £21.35 billion in revenue in the first quarter. Their estimate for earnings per share (EPS) was capped at 54 pence per share. In its report on Thursday, Comcast topped analysts’ estimate for EPS posting 57 pence per share but its revenue at £21.24 billion fell slightly short of the forecast.

At £1.68 billion, Comcast’s net income in Q1 was reported 40% down as compared to £2.79 billion in the comparable quarter last year. Its adjusted net income printed at £2.63 billion in the first quarter that was 6% down versus the year-ago figure.

Comcast’s NBC Universal business that includes studios, theme parks, cable and broadcast channels generated £6.15 billion in revenue for the company that marked a 7% decline in the recent quarter.

As Coronavirus restricted people to their homes in the U.S, Comcast’s cable and broadband divisions managed a 4.5% year over year growth in revenue in Q1. Its wireless revenue at large climbed 52% in the first quarter.

An additional 8.8% increase in revenue from broadcast TV also contributed to offsetting the decline in other segments that were under pressure due to the ongoing health crisis.

CEO Brian Roberts’ comments on Thursday

According to CEO Brian Roberts of Comcast:

“While parts of our business have been more impacted by COVID-19 than others, we have continued to innovate. We are distributing our content in new ways, as evidenced by the recent launch of Peacock on X1 and Flex.”

Other noticeable figures in Comcast’s report included a 2.2% decline in ad revenue, 31.9% in theme parks revenue, 5.8% in sky revenue, and 22.5% in filmed entertainment revenue.

Comcast is currently a little over 10% down year to date in the stock market. The company is valued at £142 billion and has a price to earnings ratio of 13.77.