uploads///Comcast NBCUniversal reveues

Here’s What’s Driving Comcast’s NBCUniversal Performance

By

Feb. 23 2018, Updated 3:38 p.m. ET

NBCUniversal in 4Q17

Comcast’s (CMCSA) NBCUniversal segment has been generating stable revenue growth for several quarters. In 4Q17, the company posted strong revenue growth for the division, driven by record profitability in its film business and its growing park and TV business. Its retransmission deals, robust movie pipeline, and strong sports content also led to the segment’s growth.

In 4Q17, the NBCUniversal segment delivered $8.8 billion in revenue, which grew 4% YoY (year-over-year). In 2017, the division posted an increase of 4.4% to $33 billion. However, excluding the revenue impact of $1.6 billion from the 2016 Summer Olympics in Rio de Janeiro in 3Q16, the segment’s overall revenue rose 10.1% YoY in 2017.

Article continues below advertisement

Driving factors for the NBCUniversal segment

It seems that the parks business has been significantly driving Comcast’s NBCUniversal segment for the past few quarters. Theme park revenues increased 8.7% YoY in 4Q17 and contributed to the segment’s performance, while cable networks grew 7.5%. The broadcast television division also boosted NBCUniversal’s revenues by 4.1%.

The opening of new attractions such as the Volcano Bay Water Theme Park at Universal Orlando Resort in Orlando, the Despicable Me Minion Mayhem ride in Japan, and the Wizarding World of Harry Potter at Universal Studios Hollywood led to the rise in revenues for the theme park unit in 2017.

Although the number of cable subscribers declined in 4Q17, the overall cable networks business improved YoY. It was fueled by higher distribution, content licensing, and advertising revenue for Comcast’s cable networks business. However, the ad business in the broadcast unit remained soft in 4Q17 due to a decline in audience ratings and the absence of political ads.

CBS (CBS) and Charter Communications (CHTR) posted YoY declines of 3% and 17.3%, respectively, for advertising revenue in 4Q17 due to a weak political environment. Time Warner (TWX), on the other hand, delivered advertising revenue growth of 2% in 4Q17.

NBCUniversal in 2018

In 2018, Comcast expects to have a strong lineup of movies such as Jurassic World: Fallen Kingdom and the third film in the Fifty Shades trilogy. They could boost NBCUniversal’s film business. Volcano Bay in Orlando, the Minion ride in Japan, the Fast & Furious ride in Orlando, and the Kung Fu Panda attraction in Hollywood are also expected to benefit the company’s NBCUniversal segment.

Advertisement

More From Market Realist