NBCUniversal parent Comcast Corp. has released its first quarter 2025 earnings report, and for one financial analyst and media advertising forecaster, the negative movement within the company’s advertising business is a sign that “soft ad trends” for broadcast television station owners are making growth opportunities for linear properties more difficult to predict.
As reviewed by Madison and Wall founder Brian Wieser, Comcast’s advertising business experienced an 6.8% year-over-year decline on an ex-political and constant currency basis.
There’s also the fact that “reduced interest in local cable TV” among marketers has only increased as “cord cutting” by consumers continues. In Q1, the Xfinity parent in the U.S. shed some 11% of its domestic video subscriber base. As Wieser notes, that’s in-line with trends from recent quarters and “would undoubtedly be a key driver” behind the lower interest in MVPD advertising opportunities seen by some advertisers.
Wieser took a magnifying glass to the NBCU unit, and here advertising revenue declined by 6.9%, including local broadcasting political advertising in both periods. “Presumably, ex-political, the decline was somewhat softer, perhaps closer to 6%,” Wieser said, noting that Comcast executives cited the “volume and timing of sports content” for the change in results. This points to the absence of an NFL Wild Card game. Otherwise, Wieser finds advertising would have been flat.
Then, there’s the OTT platform bound to get outsized attention once again at NBCU’s Upfront presentation in mid-May at Radio City Music Hall: Peacock. And the bird is not all that healthy, with Wieser noting that Peacock “only grew by 2.5%.”
While Peacock now represents 22% of segment ad revenue, there are signs that Peacock’s growth isn’t where some within NBCU — or analysts — believe it could be. “For context, Peacock’s total revenue grew by a strong (but decelerating) 16.4% for the quarter, primarily driven by subscriber gains and distribution revenue,” Wieser says. “Although growth is stronger than what we saw from Netflix in Peacock’s core U.S. territory, it remains significantly smaller.”
Wieser also notes that the growth occurred despite a significant reduction in content costs, which amounted to $976 million during Q1 compared to $1.2 billion in the year-ago quarter.
CYCLICAL OR STAPLE Q1 EARNINGS?
For MoffettNathanson Senior Analyst Craig Moffett, “all-weather durability” is “the most charitable reading” of Comcast’s “diversified collection of assets.” It could be Universal’s big year — unless tariffs and economic uncertainty wreak havoc on those aspirations, Moffett notes.
But, he adds, “A less charitable reading is that Comcast’s non-cable assets make the company highly susceptible to a recession, not just in the U.S. but globally.” Broadband customer declines were also seen in Q1.
“Comcast’s non-cable assets make the company highly susceptible to a recession, not just in the U.S. but globally.” — Craig Moffett
Lastly, Moffett says “the center of gravity of Comcast’s portfolio is still Cable infrastructure,” and that business is about as recession resistant as you can get, he declares.
MoffettNathanson has a “Buy” rating on “CMCSA” and puts the target price at $58.
As of 11:11am Eastern, shares were valued at $32.91, down 4.5% from Wednesday’s closing price.
Overall, Comcast in Q1 reported revenue of $29.89 billion, slightly exceeding the consensus estimate of $29.8 billion. But, the company’s adjusted EPS came in at $1.09, beating the consensus estimate of $0.99 with ease. Adjusted EBITDA came in at $9.53 billion, exceeding the consensus forecast of $9.13 billion.
“We had strong financial results in the first quarter, growing Adjusted EPS mid-single digits and generating $5.4 billion of free cash flow while investing in our six growth businesses and returning $3.2 billion to shareholders,” Comcast Chairman/CEO Brian Roberts said.
