Comcast execs speaking to Wall Street analysts on their first-quarter earnings call Thursday maintained they have not yet seen Trump tariff uncertainty hit their financials.
Theme park bookings are holding up despite data indicating notable declines in overall air travel, and advertising is also on course, the company said. The arrival this fall of NBA games as part of an 11-year rights deal is expected to deliver a big boost to NBCUniversal’s ad business. The commentary followed the release of quarterly financials, which narrowly beat analysts’ estimates but unnerved investors with disclosures of broadband losses and a 7% year-over-year drop in domestic advertising.
“While we have not yet seen any impact from the current macroeconomic uncertainty, advertising is a category that has shown the most economic-related cyclicality in our business,” CFO Jason Armstrong maintained on the earnings call. “However, for the upfront and for the balance of the year, we feel well-positioned in the market.” Subtracting the impact of political and sports advertising in the year-ago period, he said, advertising was essentially flat.
President Mike Cavanagh, fielding an analyst’s question about recent airline data indicating a significant decline in travel, said the trend is not impeding the company’s theme park business. The opening next month of Epic Universe in Orlando, an ambitious park years in the planning, is a high-profile initiative for Comcast and a challenge to Disney’s nearby operations.
First-quarter results were “stable in Florida,” Cavanagh said. “What we’re seeing for advance bookings, both ticket sales and hotel bookings, are strong for the overall parks and for Epic. So, while I see the same headlines you’re seeing about airlines and the like, some of that might be outside the window of our booking windows, but what we’re seeing continues to be tracking well.”
Starting in February, the Trump administration has phased in a series of tariffs, with a major surge of retaliatory tariffs rattling markets in early April on what officials declared as “Liberation Day.” The administration has insisted that the country has been hamstrung by tariffs imposed by other countries. In response, the U.S. hit dozens of countries with major tariffs across most industrial sectors, only relenting last week after the stock market headed for its worst month since the Great Depression. The tariffs are currently on a 90-day pause as officials look to negotiate settlements with various countries, though China appears to be a significant holdout.
Comcast’s domestic parks “do draw a lot of folks from the U.S. and a lot of folks from markets in the South,” Cavanagh noted. “In the case of Florida, they’re not necessarily hopping on planes to get there, so there may be a delayed effect in terms of what the airlines are starting to report on and what we see.”
In L.A., where the company operates Universal Studios, customers have been “staying away” to a surprising degree after the wildfires in January, Cavanagh conceded. But parks in Japan and China, meanwhile, are thus far “stable,” he added.
Media companies have begun to report earnings for the January-to-March quarter against a backdrop of significant economic turmoil. Thus far, the message from the C-suite has been sanguine, with Imax on Wednesday insisting there would be no hit to its business from the U.S.-China trade war. Netflix last week only glancingly addressed the macroeconomic climate, as the company is seen as being shielded from most of the downside. Netflix stock this week hit an all-time high.
As far as Comcast’s wireless business, which saw its best quarter in two years in terms of subscriber additions, Connectivity division head Dave Watson was asked about the company’s subsidizing of handsets for customers. If those handsets, made in China, were to increase in price, would Comcast be forced to pass those higher costs along to customers?
“When it comes to macroeconomic and other issues, we have figured it out, whether it’s competitive intensity, we think we’ll manage through it and we have good offers on devices,” Watson said. “We’ll see how things go, but our core service offerings provide substantial value. And that is our focus.”
