Universal Orlando and Universal’s other theme parks continued to improve parent company Comcast’s earnings last quarter, but a top executive on Thursday nonetheless raised the possibility of layoffs and other cost-cutting across the company in preparation for a potential recession next year.
“As we enter the fourth quarter and look to our year ahead, we remain focused on driving long-term growth during an increasingly challenged economic environment,” Comcast President and CFO Mike Cavanagh said during a third-quarter earnings call Thursday.
“As a result, we expect we will be taking severance and other cost reduction-related charges in the fourth quarter in anticipation of expense reduction actions that will provide benefits in 2023 and beyond,” he continued.
Cavanagh did not elaborate on where the cuts could occur.
Economists have warned that the U.S. could fall into recession as the Federal Reserve continues to raise interest rates to fight the nation’s high inflation rate.
Comcast’s revenue fell by over $400 million this quarter compared with the same period in 2021, from nearly $30.3 billion to $29.8 billion, even as its adjusted net income and adjusted earnings grew. Year to date, Comcast’s revenue is over $4.8 billion higher than it was at this time in 2021.
As of December 2021, entertainment giant Comcast employed 189,000 people between its various divisions, including media and entertainment sector NBCUniversal, broadband segment Sky and cable, federal filings show. Of Comcast’s workforce, about 24,000 worked at Universal Orlando in June, according to most recent figures from the Orlando Business Journal.
Jeff Shell, CEO of NBCUniversal, said the uncertain economy has not affected attendance at Universal’s theme parks so far.
“We’re seeing no effects of that right now in the theme parks, either in terms of our actual performance or our bookings going forward,” Shell said Thursday. “Florida’s really strong, Hollywood’s really strong, Japan really ended the quarter pretty strong.”
Each of the company’s global theme parks saw growth during the third quarter, propelling NBCUniversal’s adjusted earnings to a record high of $819 million, 88.6% higher than 2021′s third quarter.
The theme park division’s revenue totaled over $2 billion, a 42% increase from last year.
The company’s U.S. parks have particularly strong demand, with attendance and guest spending increasing year-over-year, Cavanagh said.
Universal Orlando saw its highest adjusted earnings on record for a third quarter, despite it closing on Sept. 28 and 29 due to Hurricane Ian, Cavanagh said, without providing specific figures.
The company’s theme parks in Asia are also recovering from early losses and pandemic restrictions, he said. Universal Beijing Resort had its first profitable quarter since opening in September 2021, while Universal Studios Japan is seeing visitor numbers increase after pandemic capacity caps were lifted in March.
“We’re seeing clear evidence that the investments we made throughout the pandemic continue to pay off,” said Brian Roberts, Comcast CEO and chair.
He mentioned the openings of the Velocicoaster roller coaster in Orlando, the Secret Life of Pets ride in Universal Studios Hollywood and the Super Nintendo World-themed land in Japan.
Roberts said he was “especially excited” for Epic Universe’s opening at Universal Orlando Resort in summer 2025.
The resort’s third Orlando theme park will “transform Universal Orlando into a week-long destination,” he said, echoing a point Comcast Executive Vice President and Deputy CFO Jason Armstrong made during a financial conference in September.
The company has made “significant progress” in building Epic Universe, Cavanagh said, without providing details.
