March 24, 2020
With its amusement parks business shuttered, Hollywood movies on hiatus and Olympics coverage postponed, Comcast issued a warning to investors that its myriad business segments could have “material adverse” impact in the short-term — including the first quarter ending March 31.
The warning mirrors what The Walt Disney Co. is going through, with some observers speculating Bob Iger’s sudden decision to hand over CEO duties to Bob Chapek revolved largely around his realization of what was in store financially for the Mouse House.
Comcast Treasurer William Dordelman, in the filing, said the company has closed all theme parks, and delayed Universal Pictures’ distribution of films both domestically and internationally, in addition to the disruption in production and availability of movies and television programming in the United States and globally, postponement of sports events, including the Olympics, and suspension of entertainment content production.
Dordelman said the global situation will “materially exacerbate” Sky’s previously deteriorating economic environment and advertising market in the U.K. and Europe.
“Our Comcast Cable business, while our network performs well to meet the challenge of business and schooling from home, will not be unaffected either as economic stress impacts our residential and business services customer base,” he wrote.
The CFO expects the “ultimate significance” of the impact of COVID-19 on businesses will vary, but will generally depend on the extent of governmental measures affecting day to day life and the length of time that such measures remain in place to respond to the virus.
Dordelman said it is impossible to predict the extent and duration and the degree to which supply and demand for Comcast products and services, including advertising, will be affected.
“This uncertainty makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the impact of COVID-19 could have a material adverse impact on our results of operations over the near to medium term,” he wrote.