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Why Comcast Stock Is Tumbling Despite an Earnings Beat

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Key Takeaways

  • Comcast beat analyst estimates for first-quarter revenue and profit as its mobile service division and Peacock added subscribers in the period.
  • However, cable and broadband each lost customers, continuing the downward trend for each of the divisions.
  • Despite the earnings beat, shares fell after the opening bell Thursday.

Comcast (CMCSA) beat analyst estimates for first-quarter revenue and profit Thursday but shares fell as cable and broadband subscriber numbers continued to decline.

The company generated $30.06 billion in revenue in the first quarter, above the $29.87 billion analysts expected, according to estimates compiled by Visible Alpha. Comcast also reported $3.86 billion in net income, or earnings per share (EPS) of 97 cents, beating estimates of $3.63 billion and 91 cents per share, respectively.

The company reported solid subscriber growth in its mobile service division, adding 289,000 wireless lines in the quarter, but cable and broadband customers fell by 487,000 and 65,000, respectively. Losing cable and broadband subscribers has been an issue in previous quarters for the entertainment and media conglomerate.

The internet space has become increasingly competitive, with Comcast working to compete with other giants like Verizon (VZ), T-Mobile (TMUS), and AT&T (T), all of which also report earnings this week.

Peacock continued to grow, reaching 34 million paid subscribers in the quarter, 55% higher than the number of subscribers at this time last year, and generating over $1 billion in revenue for the second consecutive quarter.

However, the streaming service still isn’t profitable; Peacock generated $1.1 billion in revenue for the quarter, but Comcast reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $639 million for the service.

“Peacock remains one of the fastest growing domestic streamers with impressive acquisition, retention and engagement trends,” Comcast Chief Executive Officer (CEO) Brian Roberts said in a statement. “Overall, I am proud of our ability to consistently perform at the highest levels and continue to position the company for long-term growth.”

Shares initially rose in premarket trading after the earnings report was released, but reversed course and were down more than 5% around 10 a.m. ET Thursday.

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