There's more to Comcast(NASDAQ: CMCSA) than its flagship cable TV business these days. The country's leading provider of broadband connectivity and cable television posted better-than-expected financial results on Thursday morning, despite continuing to shed customers for its TV business. It has surrendered 12% of its domestic video customers over the past year and is down 15% over the past two years.
Revenue declined for the quarter on flat growth in adjusted earnings. There were still a few signs of life. Comcast has been able to offset some of the sting of its media networks and cable TV segments with a 60% surge in paid accounts for its Peacock streaming service. Then we get to Comcast's theme parks segment, where it posted blowout results that should be encouraging for shareholders in Walt Disney(NYSE: DIS) and SeaWorld Entertainment(NYSE: SEAS) as they wait for their quarterly financial updates.
Thank queues
Unlike Comcast's flagship broadband connectivity, which is flat -- or its cable TV platform, which is doing worse -- the theme parks business that it operates through its global Universal Studios brand is booming. Revenue surged 25% to $1.949 billion for Comcast's gated attractions.
The bottom line is even better, as the segment's adjusted operating profit soared 46% to $658 million. This is a new first-quarter record for the business.
Comcast credits the healthy top-line gain to the strength at its international theme parks in Tokyo, Singapore, and Beijing that were limited by COVID-19-related restrictions a year earlier. However, it also experienced strong top-line gains at its domestic theme parks, and it singled out the popularity of its Super Nintendo World land, which opened at Universal Studios Hollywood in February. I can personally vouch for the huge success that Comcast has had through its partnership with Nintendo(OTC: NTDOY). I was at Universal Studios Hollywood a couple of weeks after Super Nintendo World opened, and even on a school day the park was crowded with Super Mario fans.
Image source: Comcast.
The strong showing for Comcast's theme parks business should be comforting for investors in fellow theme park operators Disney and SeaWorld. They have a somewhat similar geographical presence with their domestic resorts. All three operate attractions in Southern California and Central Florida. SeaWorld's empire also has a presence in Texas, Virginia, and Pennsylvania.
Even better, theme parks are a bigger part of the two companies that have yet to report this earnings season. Theme parks accounted for less than 7% of Comcast's total revenue and adjusted EBITDA in the first quarter. Disney's theme parks–helmed segment was greater than a third of its overall business in fiscal 2022, and it's basically all that SeaWorld Entertainment is about. If guests were flocking to Universal attractions in Florida and California, it's fair to say that the turnstile clicks were also robust at the other two operators. Disney will also benefit from the global upticks that Comcast experienced at its overseas locations.
Investors won't have to wait long to see if the entire industry is operating at a healthy pace. SeaWorld Entertainment reports on the morning of May 9. Disney follows after the market close on May 10. Within two weeks we'll have a snapshot of how the country's three leading theme park operators fared through the first three months of this year, perhaps getting an early read on how the spring break season peaked in early April and how summer bookings are playing out for these popular travel and tourism stocks.
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Rick Munarriz has positions in Nintendo, SeaWorld Entertainment, and Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Comcast, Nintendo, and SeaWorld Entertainment and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.
