Comcast Stock Plunges on Broadband Losses, Peacock Stagnation
Comcast's (CMCSA) shares experienced a significant decline of over 10% on Thursday morning. The drop was attributed to a higher-than-expected decline in broadband customers and a failure to gain subscribers for the Peacock streaming service during the fourth quarter.
Broadband Woes
The company reported a loss of 131,000 broadband users, exceeding the 100,000 decline estimated by Comcast Cable CEO Dave Watson in December. This loss reflects increasing competition from mobile providers such as Verizon (VZ), T-Mobile (TMUS), and AT&T (T), which have been catering to lower-income consumers with more flexible offerings.
Peacock Stumbles
Despite the company's emphasis on Peacock, the streaming service did not gain or lose any subscribers during the quarter, with total paying users remaining at 36 million. While Comcast improved profitability, its adjusted EBITDA loss still stood at $372 million, though management expects losses to decrease throughout the year.
Wall Street Cautious
Analysts remain cautious about Peacock's growth prospects compared to other streaming giants. Ross Benes of Emarketer noted that the company is facing challenges in the competitive streaming landscape and that its decision to sell off TV networks makes sense in light of continued cord-cutting.
SpinCo Plans
Comcast announced plans to spin off its cable properties, excluding Bravo, into a new company called SpinCo. SpinCo will house NBCUniversal's cable television networks, including USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and the Golf Channel. The company expressed optimism about SpinCo's position in the changing media landscape.