Comcast posts higher 2Q profit
Thursday, August 4, 2011
NEW YORK (AP) — Comcast Corp., the country’s largest cable TV company, is bucking the trend among cable companies by making more money from its TV subscribers.
While others are seeing declining revenue from the provision of TV signals, Comcast is still eking out some growth. That, along with the sale of still-growing broadband services and strong results from the newly acquired NBC Universal operations, let the company beat expectations with its second-quarter results.
The Philadelphia-based company reported Wednesday that its net income rose to $1.02 billion, or 37 cents per share, for the April-June period, up 16 percent from $884 million, or 31 cents per share, a year ago.
Excluding a tax adjustment and costs related to the NBC deal, which closed in January, earnings came to 42 cents per share, beating the 41 cents average expected by analysts polled by FactSet.
Revenue rose 51 percent to $14.3 billion, mainly on the addition of NBC Universal. Analysts were expecting $13.7 billion.
Comcast shares rose 4 cents to close at $22.77 Wednesday. The shares fell 4.7 percent Tuesday.
Cable companies have been losing subscribers to satellite TV services for years, and more recently, to phone-company TV services. They’ve kept their revenue growing by raising prices every year and adding new services like digital video recorders.
For Time Warner Cable Inc., the second-largest cable company, that pathway to growth appeared to end in the second quarter, as it reported a 1.3 percent year-over-year drop in revenue from TV services compared to last year. At Charter Communications Inc., the fourth-largest cable company, the drop was 3 percent.
Comcast reported a 1.3 percent increase in video revenue in the second quarter, as it earned more money per customer and customer flight slowed slightly versus last year. It still lost 238,000 TV subscribers, slightly more than analysts had expected.
Providing TV signals still accounts for more than a third of Comcast’s overall revenue, though broadband and phone services make up a growing share of the pie.
Broadband was the biggest contributor to growth in the cable segment, with the company adding 144,000 subscribers in the quarter. It was the highest second-quarter increase in two years, demonstrating that Comcast is able to buck the trend in this area as well. Since most households already have broadband, subscriber growth across the industry has slowed down in the last four years. But Comcast has upgraded 90 percent of its network be able to offer higher download speeds, and is luring over customers from phone companies.
Comcast ended the quarter with 17.6 million broadband customers, keeping its position as the largest Internet service provider in the country, ahead of AT&T Inc.
Comcast bought a majority stake in NBC Universal, parent of the Universal Pictures studio and the NBC and Telemundo broadcast networks in January. The division did well in the quarter, helped by the success of “Bridesmaids” and “Fast Five” in theaters. Advertising revenues also grew.
Steve Burke, who heads NBC Universal, said investment in content is paying off, as exemplified by the success of reality-TV show “The Voice,” which helped NBC become the No. 1 network in the U.S. for four weeks. The show is coming back after the Super Bowl.
“We expect ‘The Voice’ will be an important cornerstone of our schedule and hopefully participate in the network’s turnaround in the future,” Burke said.
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