Comcast Profit and Revenue Beat Analysts' Expectations
July 27 2017 - 6:31AM
Dow Jones News
By Austen Hufford
Comcast Corp.'s entertainment unit surged in the second quarter,
helped by the strong box-office performance of "The Fate of the
Furious," lifting profit and revenue even as cable video subscriber
losses ticked up.
At the NBCUniversal media division, revenue rose 17% to $8.33
billion. Revenue in the filmed entertainment division jumped 60%,
thanks to the latest installment of the "Fast and the Furious"
franchise.
The cable networks and broadcast TV units grew revenue and
earnings due to increases in subscription fees from pay TV
providers, but both also saw a decline in ad sales because of
ratings softness. Cable networks' ad revenues declined 0.9% to $906
million, while broadcast TV ad revenue declined 1.2% to $1.27
billion.
In the cable business, the company lost 34,000 residential and
business video customers, compared with a loss of 4,000 in the same
quarter last year.
Comcast has generally managed to withstand the turmoil in cable
TV from cord-cutting better than some peers in pay television. In a
tough environment, with consumers gravitating to streaming services
such as Netflix, Amazon, Hulu and Sling TV, the company has added
net video subscribers in five of the past seven quarters. The
cord-cutting has taken a toll on TV ratings, however, for
NBCUniversal's channels just like those of many other media
companies.
Comcast and industry analysts point to its investment in X1, a
cloud-based, set-top box system, as a reason its video business has
held up. The company said that 55% of its residential video
customers now have X1, up from nearly 40% in the same quarter last
year.
Meanwhile, Comcast and other cable providers stand to benefit on
the internet access side of their business as streaming TV
subscriptions and usage increase. Comcast added 175,000 total
internet customers in the second quarter, down from 220,000 in the
year-earlier period.
Total revenue per customer relationship, Comcast's unit revenue
figure for its cable division, increased 2.2% to $151.19.
Comcast lost 22,000 voice customers in the quarter, compared
with an addition of 64,000 in the year-ago quarter.
Overall revenue for Comcast's cable division, which makes up 61%
of revenue, rose 5.5% to $13.12 billion.
Comcast recently launched a new wireless service, aimed at
adding a fourth pillar to the typical television-phone-internet
bundles. The mobile service is only for customers who subscribe to
at least its internet service already.
The cable operator is relying on a five-year-old network-resale
agreement with Verizon Communications to offer its service.
Comcast, along fellow cable provider Charter Communications Inc.,
has explored a deal with Sprint Corp. that could provide an
alternative reseller arrangement, potentially with better terms,
people familiar with the matter have said.
Comcast has signaled that it views the wireless service as an
add-on for its customers, aimed at increasing profits and reducing
the percentage of customers leaving its service.
In all, net income rose to $2.51 billion, or 52 cents a share,
up from about $2.03 billion, or 41 cents a share, a year ago.
Revenue grew 9.8% to $21.17 billion.
Revenue and profit exceeded estimates from analysts, who were
projecting earnings of 48 cents a share on $20.86 billion in
revenue, according to Thomson Reuters.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 27, 2017 06:16 ET (10:16 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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