Comcast Stock Plummets 10% After Disappointing Q4 Results

Comcast (CMCSA) stock experienced a significant decline of over 10% on Thursday morning following the release of the company's fourth-quarter earnings report. The report revealed a larger-than-anticipated drop in broadband customers and a lack of subscriber growth for the Peacock streaming service.

Declining Broadband Subscribers

Comcast lost 131,000 broadband users in Q4, exceeding the estimated 100,000 loss predicted by Comcast Cable CEO Dave Watson in December. The escalating losses suggest increased competition from mobile providers such as Verizon (VZ), T-Mobile (TMUS), and AT&T (T), which have targeted lower-income consumers with competitive offerings.

Despite Losses, Comcast Remains Committed to Connectivity

Despite the challenges, Comcast emphasized its commitment to the connectivity business. The company announced strategic changes to leverage its strengths amidst the growing demand for internet access driven by the streaming boom. Comcast president Michael Cavanagh highlighted the importance of wireless, noting the cost-saving benefits of bundled packages for consumers.

Decline in TV Subscribers

Comcast also reported a decline of 311,000 TV subscribers, reflecting the ongoing trend of consumers ditching cable in favor of more affordable streaming options. The company recently launched a new sports and news TV package, including Peacock, for a $70 monthly subscription, which is lower than the price of competing services like YouTube TV.

Peacock's Subscriber Growth Stalls

On the earnings call, Comcast emphasized the significance of Peacock, but the platform did not gain or lose any subscribers in the quarter, with total paying users remaining at 36 million. While Comcast improved profitability, Wall Street analysts remain cautious about Peacock's prospects compared to larger streaming giants.

Spinning Off Cable Properties

Late last year, Comcast announced plans to spin off its cable properties, excluding Bravo, as part of a strategy to combat the decline in cable viewership. The spun-off company, SpinCo, will include NBCUniversal's cable television networks, such as USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and the Golf Channel. Comcast expressed optimism about SpinCo's potential as a well-capitalized, independent entity in the evolving media landscape.