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New Launches Drive Comcast’s Theme Park Business

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Theme park revenue growth

Comcast’s (CMCSA) theme park unit is part of its NBCUniversal segment, which reported 7.7% year-over-year growth in revenue in 3Q17. This growth was buoyed by the opening of Minion Park in Japan (EWJ) and Volcano Bay in Orlando. The continued success of Harry Potter in Hollywood has also supported the company’s theme park growth.

Compared with other units, the theme park unit, which makes up ~20% of NBCUniversal revenue, achieved the highest compound annual growth rate in the last five quarters, of 2.7%. In the first nine months of 2017, theme park revenue totaled ~$4 billion, up 10.6% year-over-year. Higher attendance and per capita spending continue to drive business. Domestic revenue growth was offset by Hurricane Irma and higher operating expenses, while international park revenue growth was affected by weakness in the Japanese yen.

Investment in theme parks

Comcast continues to invest heavily in its theme parks. In 3Q17, the company spent $199 million on theme parks, down 12.7% year-over-year. In 2017, Comcast expects NBCUniversal’s capital expenditure to rise 10% from the $922 million spent last year.

NBCUniversal’s 2017 capital expenditure represents just ~42% of Disney’s (DIS) fiscal 2017 capex of $2.4 billion. In the last five quarters, the company has maintained an average capital expenditure of ~$660 million.

To compete with theme park peers Disney and SeaWorld Entertainment (SEAS), Comcast’s NBCUniversal needs to open new attractions, both domestically and internationally. The company plans to expand its international theme park business by opening a Universal Studios in Beijing, China (FXI). Such new launches may boost the company’s theme park revenue.

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