Jeff Shell, CEO of Comcastentertainment unit NBCUniversallast discussed commercial break and theme park trends amid economic clouds during the conglomerate’s second quarter earnings conference call on Thursday. But as with rising inflation and other economic concerns, the picture remains somewhat unclear.
When asked about the impact of macroeconomic trends on advertising, Shell said, “the advertising market is choppy … Some segments are doing better, some segments are doing worse.” The TV upfront was “much better than we expected” for the company, he emphasized. “So, definitely some jerkiness, but nothing really dramatic,” he concluded.
Asked to explain what else “jerky” means, Shell said, “What I mean by jerky is that there is no broad decline or rise.” He emphasized that media ad revenue in the second quarter, excluding the NHL playoffs aired by the company in the same period of 2021, “was actually higher in the quarter, which I think is better than some of the the other companies that have reported so far.”
For example, in the spread advertising market, car spending has fallen due to a lack of new cars on lots, while the pharmaceutical industry is spending a lot of money, he added.
Management on the call pre-lauded more than $7 billion in pledges in the TV commercial that previously touted the company as its most profitable ever.
When asked about NBCU’s theme parks, Shell said the company has traditionally been subject to economic impacts, but the company has yet to see any of that. “I think we feel really good about the parks and feel that there is still a lot of growth ahead of us, despite the macro challenges that we may or may face; we just haven’t seen it yet.”
Wall Street analysts entered the latest earnings season with a focus on color commentary and forecasts amid high inflation and a broader set of economic storm clouds that have led some to raise concerns about an impending recession, which would hit ad revenue. “The pivot to streaming has not reduced risk to media estimates of a slowing economy,” Morgan Stanley analyst Benjamin Swinburne warned in a report dated July 18.
“We are reducing our NBCU revenue in the second quarter from $9.0 billion to $8.9 billion, mainly due to lower ad expectations as we believe the scatter market started to weaken in the second half of the quarter,” it wrote. Wells Fargo analyst Steven Cahall in his results. sample report. “In addition, we think NBCU will become a greater focus in the second half of 2022 as we have heard reports of weakness in the scatter market and continued concerns about a weakening consumer. As such, we are reducing our core ad revenue for the second half at NBCU by 5 percent from our previous estimate and reducing core advertising by 8 percent for 2023. We are also reducing our theme park revenue by 7 percent to $6.9 billion in 2023.”