Comcast’s (CMCSA) stock plummeted over 10% on Thursday morning after the company reported a larger-than-expected decline in broadband customers during its fourth quarter. The company saw a loss of 131,000 broadband users, exceeding CEO Dave Watson’s December estimate of 100,000.
This decline reflects increased competition from mobile providers such as Verizon (VZ), T-Mobile (TMUS), and AT&T (T), which have attracted lower-income consumers with flexible offerings.
Despite the losses, Comcast remains committed to its connectivity business and announced strategic changes to focus on its strengths. CEO Michael Cavanagh emphasized that wireless services are a key differentiator, citing converged offers as great value for consumers.
Comcast’s struggles in broadband come amidst a decline of 311,000 TV consumers as more people cut the cable cord to opt for streaming services. The company recently launched a new sports and news TV package, including Peacock, at $70 per month – a price lower than its virtual competitor YouTube TV (GOOGL, GOOG).
Peacock subscriber growth stagnated, with total paying users remaining steady at 36 million. However, the company improved profitability, reporting an adjusted EBITDA loss of $372 million compared to $825 million in the same period last year.
Analysts remain cautious about Peacock’s performance relative to other streaming giants. MoffettNathanson analyst Craig Moffett noted that there was no decline in subscribers after the Summer Olympics, a positive sign.
Despite this, some analysts warn that it is becoming increasingly difficult for Peacock to compete in the streaming wars due to rising costs. Analyst Ross Benes at Emarketer expressed concerns that cord-cutting continues unabated and buyer prospects for Peacock’s TV networks will be limited.
The company plans to spin off its cable properties, excluding Bravo, into a new entity called SpinCo. CEO Cavanagh emphasized optimism over this venture, citing the benefits of an independent, well-capitalized company with a focused management team and strong portfolio of news, sports, and genre-based entertainment.
Source: https://finance.yahoo.com/news/comcast-stock-sinks-as-peacock-fails-to-add-more-subscribers-broadband-losses-disappoint-164329954.html