- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
NBCUniversal’s second-quarter adjusted earnings rose nearly 13 percent, helped by a return of the entertainment unit’s theme parks business to profitability after a year-ago loss due to the coronavirus pandemic, parent company Comcast said Thursday.
The media, entertainment and technology conglomerate said the increase came despite a $363 million loss related to streaming service Peacock in the latest period. Peacock now has 50 million sign-ups, and more than 20 million monthly users. In April, Peacock had 42 million sign-ups, touting at the time that the streamer had been “benefiting from the recent addition of exclusive domestic streaming rights to WWE Network and The Office.”
This time around, the growth was due to the premiere of Boss Baby 2, the debut of the original series Dr. Death, and the beginning of the Tokyo Olympics.
And the Olympics, which are happening now, were a hot topic on the call. NBCUniversal CEO Jeff Shell said on the company’s earnings call that they will turn a profit, despite headwinds from the pandemic, and the one-year delay.
“We have had some bad luck [with the delay, COVID, and upsets during the competitions], but if you look at the product, it’s fantastic,” Shell said, adding that the “drumbeat of negativity” may have led to some of the decline in linear TV viewership.
He added that the company is learning quite a bit from these games, and “will change the product, change the offering” for the 2022 Beijing Winter Olympics, which are only 6 months away. “It is impossible to understate the important of the Olympics for NBCUniversal,” he added.
Shell also expanded on Peacock’s performance during the company’s earnings call, telling analysts that “we are really at the beginning of our content rollout at Peacock,” noting the original shows, Olympics, and the return of shows that are currently on Hulu. He also noted the recently-announced Exorcist deal, which he said gives the company “optionality” for the second and third films.
That being said, Shell added that the company will “probably ramp up investment modestly, but we have so much content coming to Peacock, it doesn’t have to be significant.”
Management has so far this year also lauded the “strong” usage for Peacock, saying it has come in at around double the internal projections. For example, Comcast chairman and CEO Brian Roberts said a few months ago that Peacock users were consuming “nearly 20 percent more programming hours each month than our traditional audience on NBC.” The streamer at the time had just crossed 1 billion total hours watched, “nearly double our plan,” he said.
On the advertising side, Shell said he was happy with both the volumes and CPMs at Peacock.
Peacock will also roll out internationally, beginning with Comcast-owned Sky, where it will be included at no extra cost. “We look forward to finalizing agreements with other programing and distribution agreements in additional markets,” Roberts said.
Comcast on Thursday also said it has restarted its stock buyback program, and its cable systems posted improved subscriber trends in key areas.
NBCU’s second-quarter EBITDA reached $1.55 billion, with the return of sports boosting advertising, but also driving up costs. Revenue jumped 39.2 percent to $7.96 billion.
Within NBCU, studios unit revenue increased 8.4 percent to $2.2 billion, “primarily reflecting higher theatrical revenue” after a “higher level of theater closures and theaters operating at reduced capacity due to COVID-19 in the prior-year period,” and also due to the success of releases in the latest period, including F9. Adjusted EBITDA fell 51.7 percent to $156 million on “higher operating expenses,” driven by higher programming and production expenses reflecting “an increase in television series production and comparisons to the prior year period when production was paused due to COVID-19, as well as higher advertising, marketing and promotion expenses reflecting a higher number of theatrical releases.”
Media unit revenue jumped 25.7 percent to $5.1 billion in the second quarter thanks to higher advertising, distribution revenue and other revenue. Advertising revenue rebounded 32.8 percent, “reflecting an increase in the number of sporting events and higher pricing in the current period, and reduced spending from advertisers in the prior-year period as a result of COVID-19,” the company said. These gains were “partially offset” by ratings declines. Distribution revenue rose 19.0 percent. “Other revenue increased 31.1 percent due to an increase in revenue from our digital properties,” the company said. Adjusted media EBITDA fell 15.8 percent to $1.4 billion as higher operating expenses, driven by programming and production, more than offset the revenue improvement.
The media results included $122 million of quarterly revenue and a $363 million adjusted EBITDA loss related to Peacock. That compared to $6 million in revenue and a loss of $117 million in the year-ago period. Beginning with the first quarter of 2021, Peacock results, previously reported in the “corporate and other” segment, have been included in NBCUniversal results.
Theme parks unit revenue for the second quarter increased by $958 million to $1.1 billion after “our theme parks were closed for either the majority or entirety of the period as a result of COVID-19” in the same quarter of 2020. Theme parks adjusted EBITDA swung from a $393 million loss to a $221 million profit, which included pre-opening costs related to the Universal Beijing Resort.
Roberts said that growth at the parks was “faster than I thought would happen,” especially with very little international visitation, but that numbers at Orlando were now almost at 2019 pre-pandemic levels. Ultimately, the company doesn’t expect a return to growth until international travel restrictions are lifted.
At Comcast’s cable systems, total customer relationships increased by 294,000 to 33.8 million in the second quarter. Broadband subscriber net additions came to 354,000, compared with 323,000 in the same period of 2020. Total video customer net losses of 399,000 compared with losses of 477,000 in the prior-year quarter.
“We delivered excellent results in the quarter, continuing our great start to the year,” said Roberts. “At NBCUniversal, adjusted EBITDA increased an impressive 13 percent, fueled by the recovery at theme parks, particularly at Universal Orlando.”
He added: “I have great confidence in our strategy and our ability to execute, which is reflected in our decision to restart our share repurchase program during the quarter, earlier than previously planned.”
Roberts also said that he believes the company does not need any major deals to keep growing, though he did sound open to international partnerships, particularly in streaming.
Comcast shares were higher in pre-market trading.
Sign up for THR news straight to your inbox every day