Comcast's Earnings Rise 26%, Lifted by Broadband Growth
January 23 2020 - 7:30AM
Dow Jones News
By Lillian Rizzo
Cable giant Comcast Corp.'s net profit rose 26% in the fourth
quarter, once again riding on the back of internet subscriber
growth amid continued pay-TV customer losses.
The Philadelphia company reported a profit of about $3.16
billion in the fourth quarter, or 68 cents a share, meeting FactSet
analysts' estimates. This is up from $2.51 billion, or 55 cents a
share, in the same period last year.
Revenue rose 2% to $28.4 billion, and Comcast said it would
increase its dividend by 10% to 92 cents a share this year. It is
the second year in a row the company raised its dividend by
10%.
The company added 442,000 high-speed internet customers in the
quarter, and lost 149,000 pay-TV customers -- marking the 11th
consecutive quarter of pay-TV customer erosion.
Comcast's broadband business generated $4.8 billion in revenue,
while its traditional pay-TV unit brought in about $5.5
billion.
Revenue at Comcast's NBCUniversal unit fell 2.6% to $9.15
billion, owing in part to the poor performance of its filmed
entertainment division, which was affected by the weak release of
"Cats."
Last week, NBCUniversal unveiled its streaming platform,
Peacock, as the company embraced the proliferation of people
cutting the cord in favor of direct-to-consumer apps such as
Netflix Inc. and Walt Disney Co.'s Hulu.
Unlike Netflix, Hulu and many of its other competitors, Peacock
is banking on an ad-supported business model that will allow it to
offer a limited version of the app for free, and an ad-supported
version for $4.99 a month. A no-commercials version will be
available for $9.99.
Company executives have previously said Comcast won't chase
cable customers defecting to streaming apps. Instead, Comcast's
focus will remain on its broadband business and its investment in
Peacock, on which it plans to spend $2 billion over the next two
years.
Comcast's pay-TV and broadband customers will receive
ad-supported Peacock for free beginning in April.
By 2024, Comcast expects to have between 30 million and 35
million active Peacock subscribers, resulting in annual revenue of
$2.5 billion.
Comcast's Xfinity Mobile, which launched more than two years
ago, added another 261,000 customers in the fourth quarter, a 15%
increase from the same quarter in 2018. In total, Comcast has more
than 2 million mobile customers as it continues to view the
business as a way to hold on to existing customers. The unit
generated $372 million in revenue.
The U.K.-based Sky performed well, more than a year since being
acquired by Comcast. Sky reported a 10% revenue increase to more
than $5 billion during the quarter.
Comcast had 55.5 million Comcast Cable and Sky subscribers at
the end of the fourth quarter.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
January 23, 2020 07:15 ET (12:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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