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Comcast (NASDAQ:CMCSA) shares are down more than 8% Thursday following the company’s earnings release before the open.
Comcast topped expectations, posting second-quarter earnings of $1.01 per share, $0.09 above the analyst estimate of $0.92. Revenue was $30.02 billion, also beating the consensus estimate of $29.89 billion.
While the company beat estimates, investors were disappointed with subscriber numbers in its broadband and streaming businesses which remained steady, reflecting a slowdown.
Comcast’s significant broadband subscriber growth during the pandemic has now stalled in the previous three quarters.
Following the report, a Rosenblatt Securities analyst reiterated a Neutral rating on the stock, stating the company “cited a familiar list of reasons for customer decline.”
“Broadband churn remains ‘well below’ 2019 levels. But new connects are low. One reason is a ‘dramatic’ and accelerating decline in move activity, which was 12% below 2Q19 in Comcast’s footprint, and the lowest level since the pandemic began, suggesting incremental headwinds from the weakening housing market. Another issue is reversal of pandemic trends, with lower income customers stepping back from broadband uptake, and reverting to ‘pre-pandemic patterns,'” wrote the analyst.
He added: “Seasonal disconnects that normally happen in 2Q returned this year, but were absent the last two years because of the pandemic. Comcast also said that fiber ‘is an increasing percentage in our footprint.’ Strong growth in Fixed Wireless Access alternatives was also noted, but was said to not be driving churn (a distinction from fiber) and to instead potentially be part of the factors weighing on new additions.”
