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Comcast Continues to Focus on Attractions at Its Theme Parks

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Revamping of existing attractions and launch of new ones

Comcast (CMCSA) continues to add new attractions and is revamping existing attractions at its theme parks in Orlando, Florida, and Hollywood, California. On May 10, the company announced that it’s in the process of revamping its Incredible Hulk roller coaster at its Universal Islands of Adventure theme park in Orlando and will relaunch it later this year.

In March of this year, Comcast stated at a Morgan Stanley (MS) conference that it’s planning to open a water park in Orlando. It also stated that its hotels in Orlando have excellent occupancy rates of about 90%. In April, the company also opened a Harry Potter theme park in Hollywood.

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Comcast’s Theme Parks segment had a strong 1Q16 boosted by higher per capita guest spending even though earlier this year Comcast raised the prices of its theme park tickets. It was followed by its rival, the Walt Disney Company (DIS), which also announced that it would introduce seasonal pricing for daily tickets. This means that tickets purchased at Disney’s theme parks during weekends and holidays will be more expensive.

Comcast Theme Parks segment in 1Q16

In 1Q16, Comcast’s Theme Parks segment saw revenues of $1 billion, up by 57.5% year-over-year, and had an OIBDA (operating income before depreciation and amortization) of $375 million. Comcast’s Theme Parks segment benefited from higher per capita guest spending. The company also plans to open a theme park in Beijing, China (FXI).

Comcast expects capital expenditure to rise by about 10% in 2016 for its NBCUniversal businesses. This is because the company plans to continue to invest in its theme parks and to consolidate Universal Studios Japan (EWJ). In 3Q15, Comcast acquired a 51% stake in Universal Studios Japan.

Comcast makes up 3.0% of the PowerShares QQQ Trust Series 1 ETF (QQQ). QQQ has 4.7% exposure to the TV and radio sectors. QQQ also invests 0.66% of its holdings in 21st Century Fox (FOXA) and 0.76% of its holdings in Netflix (NFLX).

In the next article in this series, we’ll discuss Comcast NBC Universal’s plans to strengthen its advertising business.

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