Comcast Earnings Boosted by Sky Acquisition, Internet Business Growth -- Update
April 25 2019 - 12:46PM
Dow Jones News
By Lillian Rizzo
Comcast Corp. said net profit rose 14% in the first quarter,
boosted by its high-speed internet business, a spate of successful
movies and the recent acquisition of European pay-television
operator Sky PLC.
The Philadelphia company reported a profit of $3.55 billion, or
77 cents a share, up from $3.12 billion, or 66 cents a share, in
the year-earlier quarter. The quarterly profit exceeded FactSet
analysts' estimates of 68 cents a share.
Revenue rose 18% to $26.86 billion, thanks in part to the
inclusion of Sky's results, which amounted to $4.8 billion in
revenue. Sky wasn't part of Comcast during the year-earlier
quarter.
Comcast completed its acquisition of Sky in the fall,
diversifying its revenue beyond the U.S. and expanding its
international footprint. The company is exploring a global NBC Sky
news channel later this year, Comcast Chief Executive Brian Roberts
said Thursday during an earnings conference call.
The company's share price was up 3.6% in morning trading on
Thursday.
Comcast said it added 375,000 internet consumers in the period,
fueling a 10% rise in high-speed internet revenue. Chief Financial
Officer Michael Cavanagh on Thursday called the internet "the
engine of growth" for Comcast's cable business. The company also
posted strong growth at its wireless business, Xfinity Mobile,
which was launched less than two years ago. The service reached a
total of 1.4 million subscribers, compared with 577,000 last year.
The increase came as Verizon Communications Inc. reported earlier
this week that it lost a net 44,000 postpaid phone connections.
Although at a slower rate than its peers, Comcast's traditional
pay-TV business again lost subscribers, as people continue to cut
the cord in favor of streaming services like Amazon.com Inc.'s
Prime Video and Netflix Inc. During the first quarter, Comcast lost
121,000 subscribers, compared with a loss of 96,000 a year earlier.
It was the company's eighth consecutive quarter of decline.
AT&T Inc. on Wednesday reported a net loss of 544,000 pay-TV
customers, which include DirecTV satellite subscriptions and
U-verse fiber-optic packages.
NBC's film and broadcast segments each saw a 7% increase in
revenue, boosted by films including "Us" and "How to Train Your
Dragon: The Hidden World." The television segment was boosted by
successful series like "This is Us" and "The Voice."
Overall, revenue at Comcast's NBCUniversal unit fell 12% to
$8.31 billion. The unit's cable networks and broadcast-television
divisions suffered from the comparison with the year-earlier
period, during which NBC had the rights to the Super Bowl and 2018
Pyeongchang Olympics.
Earlier this year, NBCUniversal said it plans to launch an
ad-supported streaming-video service in 2020, which will be free
for pay-TV subscribers. As of March 31, the company had about 54
million customers who subscribe to Comcast Cable and Sky. Users
without cable TV will be able to purchase it for a fee.
The service will include content from NBCUniversal's TV and film
franchises, as well as original and acquired programming. The
streaming platform will first debut in the U.S. and later be rolled
out in international markets, The Wall Street Journal previously
reported. Comcast's executives didn't disclose further details
about the streaming platform on Thursday.
Comcast also owns 30% of Hulu, a streaming service managed by
Walt Disney Co., which controls roughly 60% of the company. Hulu
earlier this month agreed to buy AT&T's 9.5% stake in a deal
that valued the streaming service at about $15 billion. On
Thursday, Mr. Roberts said it was in "everyone's interest to
maintain" Comcast's stake in Hulu, calling the partial ownership of
the streaming service "valuable."
It is unclear how Disney and Comcast will split up the 9.5%
stake, The Wall Street Journal reported last week.
Disney earlier this month disclosed details of the Disney+
streaming service. The service will be offered at a $6.99 price
point, and Disney plans to include more than 7,500 episodes of
television and hundreds of movies, as well as original content.
Separate from the NBC streaming platform, in March Comcast
launched the $5-a-month service "Xfinity Flex" for its
internet-only customers, which gives access to ad-supported
streaming video channels like YouTube and Cheddar. Customers are
given a device, similar to Amazon's Fire Stick or Roku, that serves
as a gateway to such streaming apps.
Comcast has said the new device is meant to help customers
manage connected devices in their home.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
April 25, 2019 12:31 ET (16:31 GMT)
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