Comcast Tops Estimates After Losing Fewer Cable-TV Customersby
Cable company is taking share from phone, satellite companies
New X1 service aimed at dissuading customers from cord-cutting
Comcast Corp., the largest U.S. cable-TV provider, posted second-quarter profit that beat analysts’ estimates after fewer video subscribers than expected canceled service.
Profit excluding some items was 83 cents a share, Philadelphia-based Comcast said Wednesday in a statement. Analysts predicted 81 cents, the average of estimates compiled by Bloomberg. Comcast’s film business faced a tough comparison from a year earlier when it released “Furious 7” and “Jurassic World,” two blockbusters that grossed more than $1 billion each at the box office.
The company lost 4,000 cable-TV customers in the quarter, compared with a drop of 69,000 a year earlier. Three analysts surveyed by Bloomberg had projected a loss of 42,000 in a seasonally weak period when college students disconnect their cable service for summer vacation.
Comcast also signed up 220,000 internet customers, the most for a second quarter in eight years, exceeding predictions of about 192,000. As more people watch videos online instead of on TV, selling broadband has become a growing business for cable companies.
Comcast is grabbing market share from satellite and phone providers by rolling out its new X1 video platform. The service, which has been introduced in about 40 percent of its footprint, makes it easier to search for shows and movies and offers more content on demand, helping Comcast retain cable subscribers.
The company is enhancing its video service with a recent deal to let customers stream Netflix Inc.’s web video content on X1. To lure more customers, Comcast plans to start selling prepaid TV and internet service to people who normally wouldn’t qualify by waiving rules requiring a credit check or signed contract. In April, Comcast, the parent of Universal Pictures, agreed to buy DreamWorks Animation SKG Inc. for $3.8 billion.
The shares were unchanged at $67.24 at 9:52 a.m. in New York Wednesday. The stock had risen 19 percent this year through Tuesday’s close.
- Revenue rose 2.8 percent to $19.3 billion in the quarter, edging out analysts’ estimates of $19 billion.
- Net income for the quarter was $2.03 billion, down 5 percent from a year earlier. The average monthly customer bill climbed 3 percent to $147.99.
- The film unit generated $1.35 billion in sales during the quarter, down 40 percent from a year earlier when it had a stronger film slate.
- Sales in the business services division, which sells phone, web and video services to companies, rose 17 percent to $1.36 billion.
- Revenue at the NBCUniversal group, which includes the NBC broadcast network, cable channels such as USA and MSNBC, the Universal film studio and theme parks, fell 1.8 percent to $7.1 billion. The previous year’s results didn’t include Comcast’s 51 percent stake in Universal Studios Japan, which it acquired in November.
- Advertising revenue at the cable networks was flat, while total cable network sales gained 4.7 percent. Broadcast network ad revenue was up 2.9 percent from a year earlier.
- The cable operator paid $670 million in dividends in the quarter, a 6.6 percent increase from the year-earlier period, and bought back $1.14 billion in stock.