Comcast Leaps to a Record as `Get Out' Helps Film Unit Shineby
‘Fifty Shades’ also boosts sales 43% at Universal studio
Shares climb to record price of $40.29 in New York trading
Comcast Corp.’s foray into Hollywood is paying off, with box-office hits “Get Out” and “Fifty Shades Darker” boosting first-quarter profits and sending shares to a record.
The two films -- a sequel to “Fifty Shades of Grey” and a critically acclaimed horror film -- drove a 43 percent increase in sales for Comcast’s Universal unit. That fueled profit of 53 cents a share, which exceeded even the highest estimate.
The shares rose as much 3.9 percent to $40.29 in New York Thursday, the highest price since at least 1983.
The results offer the latest proof of Comcast’s ascent to the heights of the American entertainment industry, a trajectory that seemed unlikely when the Philadelphia-based company bought NBCUniversal in 2011. Comcast is showing it can compete head-on with Walt Disney Co. for TV audiences, moviegoers and theme-park tourists.
Comcast’s film unit “is back to being the star of the show,” said Craig Moffett, an analyst at MoffettNathanson, said in a note. “Things will only get better” next quarter, he added, as the next installment of the “The Fast and The Furious” franchise just opened to the largest global box-office take in history.
In all, sales at the NBCUniversal group, which includes the NBC broadcast network, cable channels such as USA and MSNBC, the Universal film studio and theme parks, grew 15 percent to $7.87 billion.
Comcast is also reversing a trend of cord-cutting. The largest cable operator added pay-TV customers for the fifth time in the past six quarters, reclaiming some market share from competitors and fighting off new online rivals. Comcast signed up 32,000 new cable-TV customers in the period, falling short of the 37,300 average of three analysts’ estimates. It added 37,000 a year ago.
Comcast executives attributed the turnaround largely to the company’s new video platform, called X1, which makes it easier to search for shows and movies, as well as YouTube and Netflix, from their cable set-top box. X1 is in about half of Comcast homes.
At the same time, the company is continuing to add residential high-speed internet subscribers. Comcast signed up 397,000 new broadband customers in the quarter, shy of the average prediction of 400,000 from three analysts. It signed up 403,000 broadband subscribers in the same quarter a year ago.
Earlier this month, Comcast unveiled a mobile phone service that lets subscribers make calls and surf the web using Verizon’s wireless network and Comcast’s millions of Wi-Fi hotspots. The company plans to bundle the new wireless service with its other products to keep video and broadband subscribers from leaving.
Moffett said the market continues to expect Comcast to move to acquire a wireless operator. But he predicted Comcast will not look to do any large deals “for awhile.”