- 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
Comcast, led by chairman and CEO Brian Roberts, said Tuesday that the coronavirus pandemic could mean a “material” hit to its financials, but said it was difficult to quantify the impact.
“The impact of coronavirus disease 2019 (COVID-19) and measures to prevent its spread are affecting our businesses in a number of ways,” the cable giant, which also owns NBCUniversal and European pay TV giant Sky, said in a regulatory filing. “For example, we have closed all of our theme parks; we have delayed theatrical distribution of films both domestically and internationally; and the creation and availability of our film and television programming in the United States and globally has been disrupted, including from the cancellation or postponement of sports events, including possibly the Olympics, and suspension of entertainment content production.”
The Comcast filing came just as news hit that the Summer Olympics in Tokyo would indeed be postponed.
Comcast’s filing continued by addressing the pandemic’s fallout for its cable systems and European pay TV businesses. “As they affect Sky, these impacts materially exacerbate what was an already deteriorating economic environment and advertising market in the UK and Europe in 2019,” it said. “Our Comcast Cable business, while our network performs well to meet the challenge of business and schooling from home, will not be unaffected either as economic stress impacts our residential and business services customer base.”
Comcast added that “the ultimate significance of the impact of COVID-19 on our businesses will vary, but will generally depend on the extent of governmental measures affecting day to day life and the length of time that such measures remain in place to respond to COVID-19.”
It also mentioned, like Disney has done, that there would be a hit to its advertising business, but said financial forecasts were difficult at a time when the length and depth of the virus crisis remains unclear. “At this point, it is impossible to predict such extent and duration and the degree to which supply and demand for our products and services, including advertising, will be affected,” Comcast said. “This uncertainty makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the impact of COVID-19 could have a material adverse impact on our results of operations over the near to medium term.”
It was the latest entertainment industry company to comment on the fallout from the virus crisis.
On March 20, WarnerMedia owner AT&T said it was canceling planned stock buybacks, including an accelerated share repurchase agreement with Morgan Stanley to buy back $4 billion of its stock, to maintain financial flexibility. “The impacts of the pandemic could be material, but due to the evolving nature of this situation, we are not able at this time to estimate the impact on our financial or operational results,” the telecom giant said.
A day earlier, the Walt Disney Co. had said that, “the impact of the novel coronavirus…and measures to prevent its spread are affecting our businesses in a number of ways,” including “ad sales impacts.” Disney highlighted that the impact of the virus on its revenue and earnings was difficult to predict amid the fluid situation and its impact across various businesses, saying the financial fallout would hinge on the size of disruptions and how long they last, along with “governmental regulations that might be imposed in response to the pandemic.”
On March 23, U.K. TV giant ITV said it would pull its dividend and make other cost savings, including in program spending, amid the coronavirus pandemic, which it said has had an “increasing” impact on its advertising revenue. It said the moves would help boost its cash reserves by more than 300 million pounds ($350 million).
On Wednesday, Bernstein analyst Peter Supino reduced his earnings forecast for Comcast and lowered his stock price target from $51 to $47. “At NBCU, we fear that millions of American job losses will accelerate cord cutting, pressuring NBC’s affiliate fees and audience,” he wrote in a report. “We expect movie theaters to lose some traffic permanently, and if we are right, Universal can’t help but lose a bit of ground to streaming-native studios. Without original production and the Olympics, Peacock’s launch should be less exciting. We also believe that advertising sales will be permanently impaired by this recession.”
Sign up for THR news straight to your inbox every day