Comcast Revenue Tops Estimates as Video Subscriber Losses Improve
July 27 2016 - 7:40AM
Dow Jones News
Comcast Corp. reported better-than-expected financial results in
the most recent quarter and limited the loss of cable customers,
despite the pressure on the pay-TV business from cord-cutting and
cheaper streaming options.
Net income in the second quarter fell to $2.03 billion, or 83
cents a share, compared with $2.14 billion, or 84 cents a share, a
year ago, dragged down by a weaker performance at the film studio
without a major blockbuster release in the period.
Revenue grew 2.8% to $19.27 billion. Both figures exceeded
estimates from analysts, who were projecting earnings of 81 cents a
share on about $19 billion in revenue, according to Thomson
Reuters.
Comcast lost 4,000 video customers in the seasonally weak second
quarter when many families move or customers cancel cable-TV
service during the summer months. It was an improvement from the
69,000 subscribers lost in the year-ago period and its best
second-quarter performance in a decade.
Cable companies are benefiting from investing more in their
cable-TV products and bundling them alongside fast broadband, as
well as offering cheaper, slimmed-down bundles of programming for
more cost-conscious consumers.
Comcast, in particular, is beginning to benefit from the rollout
of its next-generation X1 internet-connected set-top box and guide,
which the company has said increases the time customers spend
watching TV and makes them more likely to stick with Comcast. As of
the second quarter, 40% of customers now have X1 boxes. Earlier
this month, Comcast said it plans to integrate Netflix's service
into its X1 box after years of holding out from striking such a
deal.
Comcast also likely benefited from weakness at its rivals, as
AT&T focused on integrating DirecTV and Dish Network Corp.
faced blackouts amid carriage disputes, Wells Fargo analyst Marci
Ryvicker said in a research note earlier this month.
The company's broadband and business services divisions reported
sales growth in the second quarter, boosting overall revenue at the
cable business. The cable unit, which accounts for the bulk of the
company's revenue, posted 6% sales growth to $12.44 billion.
Broadband revenue increased 8.6% to $3.37 billion, as the
company added 220,000 broadband customers in the quarter compared
with 180,000 a year earlier.
Video revenue grew 2.8% to $5.58 billion, while
business-services revenue jumped 17% to $1.36 billion. Voice
revenue fell 1.1% to $893 million.
At NBCUniversal, revenue fell 1.8% to $7.10 billion, as declines
in filmed entertainment offset growth at its television networks
and theme parks. Operating cash flow at NBCUniversal was relatively
flat at $1.69 billion.
Filmed entertainment posted a 40% drop in revenue and 87%
decline in operating cash flow as Universal Pictures lacked a major
blockbuster release in the second quarter. A year ago, the studio
had box-office hits including "Furious 7" and "Jurassic World."
In April, Comcast agreed to buy DreamWorks Animations SKG Inc.
for $3.8 billion in a deal that will add the "Shrek," "Kung Fu
Panda," and "Madagascar" franchises to its film lineup and help it
challenge Walt Disney Co. in family entertainment. The deal is
expected to close by the end of the year.
Revenue grew 4.7% to $2.57 billion at the unit that includes
Comcast's cable TV networks including Bravo, USA Network and Syfy,
and operating cash flow grew 8.3% to $944 million. Revenue at the
broadcast-TV segment, which includes the flagship NBC network,
increased 17% to $2.13 billion.
Revenue at NBCU's theme parks segment grew 47% to $1.14 billion,
thanks to the inclusion of Universal Studios Japan, which Comcast
bought control of last September, as well as Universal Studios
Hollywood's opening of the Wizarding World of Harry Potter.
Write to Cassandra Jaramillo at cassandra.jaramillo@wsj.com and
Shalini Ramachandran at shalini.ramachandran@wsj.com
(END) Dow Jones Newswires
July 27, 2016 07:25 ET (11:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
DISH Network (NASDAQ:DISH)
Historical Stock Chart
From Aug 2024 to Sep 2024
DISH Network (NASDAQ:DISH)
Historical Stock Chart
From Sep 2023 to Sep 2024