10-QPeriod: Q2 FY2020

COMCAST CORP Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 30, 2020For Securities:CMCSACCZ

Summary

Comcast Corporation reported $23.72 billion in revenue for the second quarter of 2020, a decrease of 11.7% compared to the same period in 2019. This decline was primarily driven by the significant negative impacts of the COVID-19 pandemic on its NBCUniversal and Sky segments, particularly the closure of theme parks and cancellation of sporting events. Despite the revenue drop, Net Income Attributable to Comcast Corporation was $2.99 billion, with diluted EPS of $0.65, showing resilience, though down from the prior year. Cable Communications segment revenue remained relatively stable, demonstrating its defensive characteristics, while Adjusted EBITDA for the segment saw a healthy increase of 5.5%. However, the NBCUniversal segment experienced a substantial revenue decline of 25.4% and a 29.5% drop in Adjusted EBITDA, largely due to the pandemic's impact on Theme Parks, Filmed Entertainment, and Cable Networks. Sky also faced revenue challenges, with a 15.5% decrease, exacerbated by foreign currency fluctuations. The company maintained a strong liquidity position, with significant cash flow from operations and available credit facilities, enabling it to navigate the uncertain economic environment.

Financial Highlights

51 data points
Beta

Revenue

$23.71B

Net Income

$2.99B

12.6% Net Margin

EPS (Diluted)

$0.65

Total Assets

$265.98B

Cash & Equivalents

$13.98B

Free Cash Flow

$6.57B

Financial Statements
Beta
Revenue$23.71B
Operating Expenses$19.07B
Operating Income$4.65B
Interest Expense$1.11B
Net Income$2.99B
EPS (Basic)$0.65
EPS (Diluted)$0.65
Shares Outstanding (Basic)4.57B
Shares Outstanding (Diluted)4.61B

Key Highlights

  • 1Consolidated revenue decreased by 11.7% to $23.7 billion in Q2 2020, primarily due to COVID-19 impacts on NBCUniversal and Sky.
  • 2Net income attributable to Comcast Corporation was $2.99 billion, with diluted EPS of $0.65, down from $3.13 billion and $0.68 in Q2 2019.
  • 3Cable Communications segment revenue was stable at $14.4 billion, with Adjusted EBITDA increasing by 5.5% to $6.18 billion, highlighting its resilience.
  • 4NBCUniversal segment revenue declined significantly by 25.4% to $6.12 billion, with Adjusted EBITDA falling 29.5% to $1.64 billion, heavily impacted by theme park closures and event cancellations.
  • 5Sky segment revenue decreased by 15.5% to $4.08 billion, impacted by COVID-19 and foreign currency fluctuations.
  • 6The company maintained a strong liquidity position, with $13.9 billion in cash, cash equivalents, and restricted cash as of June 30, 2020.
  • 7Comcast paused its share repurchase program to accelerate debt reduction.

Frequently Asked Questions

The COVID-19 pandemic had a significant negative impact on Comcast's financial performance, particularly in the NBCUniversal and Sky segments. This was due to temporary closures of theme parks, cancellation or postponement of sporting events, reduced advertising spend, and disruptions to film production and theatrical releases. While Cable Communications showed resilience, the overall consolidated revenue decreased by 11.7% year-over-year.

The Cable Communications segment demonstrated resilience, with total revenue remaining largely stable at $14.4 billion, a slight decrease of 0.2%. High-speed internet revenue grew by 7.2%, offsetting declines in video and voice services. Adjusted EBITDA for this segment increased by 5.5% to $6.18 billion, indicating strong operational performance and profitability.

Comcast maintained a strong liquidity position with $13.9 billion in cash and cash equivalents as of June 30, 2020. The company generated substantial cash flow from operations and has access to revolving credit facilities. To manage debt, Comcast paused its share repurchase program to focus on debt reduction following the Sky acquisition. During the first half of 2020, the company made significant debt repayments totaling $10.7 billion.

The NBCUniversal segment is expected to continue to be negatively impacted in the near to medium term due to COVID-19. While theme parks in Orlando and Japan have reopened with limited capacity, the Hollywood park remains closed. The postponement of sporting events and the Tokyo Olympics, along with disruptions in film production and theatrical releases, will continue to affect revenue and profitability. The company is also investing in its new streaming service, Peacock.