Comcast Fails to Gain Broadband Subscribers for First Time

Comcast had 32.16 million subscribers at the end of the second quarter, the exact same number it had at the end of the first.

The competition for internet-service customers has intensified in recent years, with

AT&T Inc.

building out its fiber-broadband footprint and wireless carriers such as

T-Mobile US Inc.

and

Verizon Communications Inc.

offering 5G services that can be used as a substitute to a traditional broadband connection, analysts said. “There’s no question that there’s some competitive pressure,” Comcast Cable Chief Executive

Dave Watson

said on a recent conference call.

“Mobile substitution will eventually stabilize,” CEO

Brian Roberts

said on a call with investors Thursday.

A review of the company’s quarterly filings shows that Comcast added at least 100,000 net new broadband subscribers every quarter over the past 20 years, with the exception of a single instance during the 2008-09 financial crisis, when the company gained 65,000 broadband subscribers in the second quarter of 2009.

Comcast shares were down 8.6% in morning trading.

The cornerstone of Comcast’s operations, the broadband business has been a longstanding driver of growth. During the first two years of the coronavirus pandemic, the company added more than a million broadband subscribers every year, often setting records. But like its peers, Comcast warned late last year that broadband-subscriber growth was waning.

Overall, the company said net profit declined 9.2% to $3.4 billion, or 76 cents a share, from $3.74 billion, or 80 cents a share, in the year-earlier quarter. Revenue rose 5.1% to $30.02 billion.

Comcast said the number of paying subscribers to its Peacock streaming service remained stable at around 13 million. During the first quarter of this year, Peacock’s paying subscriber base had jumped by more than 40%, largely thanks to top sporting events such as the Super Bowl and Beijing Winter Olympics, as well as new original content, including “Bel-Air.”

“Given the normal ebbs and flows of our content slate, we were pleased to have stayed relatively flat for the second quarter,” Mr. Roberts said. “We look forward to a very strong fall.”

The company’s Universal Studios theme-park business reported $1.8 billion in revenue, a 65% increase from the previous year. Its movie studios-unit posted a 33% increase in revenue to nearly $3 billion, which was driven by the successful theatrical release of “Jurassic World: Dominion.”

Overall, NBCUniversal—the Comcast division that comprises theme parks, the movie studio, Peacock and TV stations including NBC—had revenue of $9.45 billion, up 19% from a year earlier.

NBCUniversal had $467 million in losses stemming from Peacock, and expect that to increase in the second half of the year.

Company executives expect Peacock to have a strong second half of the year thanks to content such as “Sunday Night Football” and the release of films that previously made their debut in movie theaters. “For Peacock, early access to premium universal films is a proven driver of subscriber acquisition and engagement,” Mr. Roberts said.

Comcast’s U.K.-based Sky unit still suffered from the loss of rights to the Italian soccer league Serie A. Revenue declined nearly 14% to $4.5 billion, and it lost 255,000 customers during the second quarter.

Comcast’s cable unit—which includes the Xfinity-branded broadband, cable-TV, and mobile businesses—saw revenue increase 3.7% to $16.6 billion, and continued to make up the bulk of Comcast’s overall revenue.

The company lost about 10,000 net broadband residential subscribers compared with the first quarter, while it added about 10,000 business-services broadband customers.

Despite the broadband-subscriber slowdown, company executives said there have been few broadband customers leaving Comcast. In past quarters, the company has attributed the slowdown to fewer people changing homes.

Cable-TV customers continued to cut the cord, with Comcast losing 521,000 video subscribers. The Xfinity Mobile cellphone segment continued to be a bright spot for Comcast, with the addition of 317,000 customers. There are now more than 4.6 million Xfinity Mobile lines.

Write to Lillian Rizzo at [email protected]