Comcast Internet Growth Makes Up for Cord-Cutting DefectionsBy
Company adds 350,000 web customers, loses 33,000 video users
Bonuses to employees cost about $170 million in the quarter
Fortunately for Comcast Corp., cord-cutters still need a fast internet connection.
The nation’s biggest cable provider lost video subscribers for the third straight quarter, but 350,000 customers signed up for broadband service. That helped the company top sales and earnings estimates for the final three months of 2017.
Underscoring its growing dependence on high-speed internet service for growth, Comcast is boosting web speeds and rolling out new features that let customers personalize their home Wi-Fi networks, allowing them to pause access during dinner or bedtime. Comcast is also branching out into the wireless business and has signed up a total of 380,000 customers for Xfinity Mobile, which became available across its service area in August.
“For those investors who didn’t get the memo that Comcast is a broadband company and not a cable TV company, this quarter should clarify things,” Bloomberg Intelligence analyst Paul Sweeney said. “The financial results and management’s commentary about the future growth drivers drove home the point that the future is broadband and its entertainment assets.”
Branching out helped Comcast overcome a loss of 33,000 video customers, compared with a gain of 80,000 a year earlier. Comcast is trying to retain cable-TV customers by offering smaller bundles of channels and rolling out its X1 platform, whose slick interface and voice-controlled remote make it easier to find programming and access Netflix and YouTube. But the cable giant faces an increasingly competitive landscape, with new online services like AT&T Inc.’s DirecTV Now offering fewer channels at lower prices.
Fourth-quarter profit rose to 49 cents a share, beating analysts’ average estimate of 47 cents. Sales climbed 4.2 percent to $21.9 billion, topping the average projection of $21.8 billion.
Shares rose 1.2 percent to $42.95 at 10:23 a.m. in New York.
In December, Comcast said it was giving $1,000 bonuses to more than 100,000 employees after the tax-cut bill passed. The move cost the company about $171 million in the fourth quarter.
Comcast also said it would increase its annual dividend by 21 percent -- from 63 cents to 76 cents -- in 2018 and buy back a minimum of $5 billion in stock this year.