CMCSK (MM)

By Shalini Ramachandran 

Comcast Corp. reduced its video customer losses in the third quarter, as its NBCUniversal media arm surged thanks largely to the success of blockbuster films like "Minions."

The cable company's quarterly profit dropped 23% compared with the prior-year quarter, when a $724 million tax-related benefit boosted its results.

Excluding certain gains and costs, adjusted profit per share for the latest quarter increased to 80 cents, up from 73 cents a share the year earlier. Revenue grew 11.2% to $18.67 billion. Analysts were projecting adjusted earnings of 80 cents a share on $18.03 billion in revenue, according to estimates from Thomson Reuters.

Comcast has been exploring new growth areas since it walked away from its bid to acquire Time Warner Cable in April amid regulatory pressure. It has announced several new streaming services, including a $15-a-month skinny TV bundle dubbed "Stream," Seeso, a $3.99-a-month comedy-focused service, and a short-form video service called "Watchable." The company is also in talks with several companies about licensing its valuable trove of television viewing data.

After years of dancing around wireless, Comcast is also seriously exploring an entry into the industry. In the past couple months Comcast informed Verizon Communications Inc. that it would like to execute on a 2011 agreement to resell Verizon's airwaves to offer cellphone service, according to a person close to Comcast. Analysts believe the company is working toward offering a "Wi-Fi-first" service that would primarily lean on its roughly 11 million Wi-Fi hot spots and use carriers' airwaves to patch up the holes in coverage.

Comcast's broadband and business services divisions posted strong revenue growth in the third quarter, offsetting video customer losses and softness in the voice business.

Comcast shed 48,000 cable TV customers, an improvement compared with 81,000 a year ago. It added 320,000 broadband customers in the quarter compared with 315,000 a year earlier. Voice customer additions slowed dramatically from 68,000 in the year-earlier period to 17,000, as the company focused on promoting "double-play" bundles of video and broadband rather than the "triple play."

Broadband revenue increased 10.2% to $3.1 billion, while voice revenue fell 1.4% to $900 million. Business-services revenue jumped 19.5% to $1.2 billion. Video revenue grew 3.3% to $5.3 billion, as higher rates offset customer losses. Overall, the cable business, which accounts for the bulk of the top line at Comcast, saw revenue rise 6.3% to $11.7 billion.

At NBCUniversal revenue jumped 21% to $7.2 billion, powered by strong growth at the filmed entertainment division and theme parks. Operating cash flow at NBCU increased 17% to $1.7 billion.

Revenue grew 7% at the unit that includes the company's cable TV networks, despite ongoing ratings pressures, but operating cash flow--a measure of profitability--declined 3.9% due to increased programming expenses from the licensing of Nascar rights. Revenue at the broadcast-TV segment, which includes the flagship NBC network, grew 11.3%, while operating cash flow grew 6.1% to $150 million.

Thanks to hits like "Jurassic World," "Minions," and "Furious 7", the filmed entertainment division is having a blowout year, with operating cash flow growing from $151 million a year ago to $376 million in the latest quarter. Operating cash flow at the theme parks segment increased 14.1% to $458 million.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

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(END) Dow Jones Newswires

October 27, 2015 07:17 ET (11:17 GMT)

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