Adjusted earnings beat by 9 cents, and wireless added 368,000 lines. Broadband losses ran about 23% worse than forecasts and well above a year earlier, as competition intensifies in Comcast's core business.
Comcast's core business had a bad quarter. Its shares had a good day.
The company lost 144,000 domestic residential broadband customers in the third quarter, compared with 91,000 a year earlier and the 116,800 analysts expected, according to FactSet. Domestic broadband revenue fell 4.7% to $6.24 billion. Video losses totaled 274,000.
Yet adjusted earnings per share of $1.07 beat the $0.98 consensus, and the stock traded at about $22.85 at 1:46 p.m. Eastern, up 3.5%. Charter Communications rose 3.1%.
The headline numbers
Revenue fell 6.1% to $29.30 billion, but rose 0.5% on a pro forma basis, which adjusts for changes in the company's structure. Adjusted EBITDA fell 5.8% to $9.11 billion, up 0.8% pro forma. Net income attributable to Comcast rose 3.5% to $3.45 billion, or 97 cents a share, while adjusted net income fell 7.3% to $3.82 billion. Operating cash flow dropped 9.1% to $7.90 billion.
What offset broadband
Wireless was the bright spot. Comcast added 368,000 mobile lines, bringing its total to 10.6 million. Bundling phone service with internet is the company's main defense against fiber and fixed-wireless competitors, and the wireless base is growing faster than broadband is shrinking in absolute terms.
Peacock posted adjusted EBITDA of $261 million on $1.8 billion of revenue, its second profitable quarter, according to Advanced Television, which also reported that theatrical revenue rose 77% to $1.1 billion.
Why the stock rose anyway
The reaction suggests that investors had braced for worse. A beat on earnings and strong wireless additions were enough to lift the stock even with a miss on the metric that matters most to the long-term story.
The risk is that this is a temporary reprieve. Broadband losses widened by more than half from a year earlier, and broadband revenue is still falling. Wireless adds help, but losing internet customers faster than expected looks like a structural problem rather than a quarterly one.
What to watch
Broadband net losses in the fourth quarter, and whether wireless additions keep pace. Pricing moves by fiber competitors will shape both.