’Battleship’ dud hits Comcast earnings in 2Q
Thursday, August 2, 2012
NEW YORK (AP) — “Battleship” failed to sink Comcast’s second-quarter earnings as strong results from cable operations overcame weak returns from the box-office flop.
The Philadelphia-based cable company, the country’s largest, on Wednesday reported net income of $1.35 billion, or 50 cents per share, for the April-to-June period. That was up 32 percent from $1.02 billion, or 37 cents per share, a year ago.
Analysts polled by FactSet had been expecting earnings of 48 cents per share for the latest quarter.
Revenue rose 6 percent to $15.2 billion from $14.3 billion a year ago and matched analyst expectations. Some of the increase was due to Comcast buying out another investor in the Universal Orlando theme parks last July. Excluding that effect, revenue rose 3.5 percent.
Comcast shares rose $1, or 3 percent, to close at $33.55 Wednesday. The day’s high of $34 was the highest level for the stock since the Internet and telecom boom of 1999.
In cable, average monthly fees were up 8 percent from last year to $148.57, helped by customers upgrading to faster broadband speeds and getting more premium channels. Overall, cable revenue grew 6 percent, demonstrating that Comcast continues to do better than smaller cable companies.
The company still lost 176,000 video subscribers in the quarter, the continuation of a long-running trend, as subscribers move over to satellite and phone-company services. But the rate of decline has slowed at Comcast, and executives suggested six months ago that they might actually add subscribers at some point this year. That was unlikely to happen in the second quarter, when college students cancel service for the summer.
Comcast has 22.1 million pay-TV subscribers, meaning it connects about one in five U.S. households. It’s also the largest provider of home Internet service, with 18.7 million customers.
At NBCUniversal, profits fell at the cable networks, which include Bravo, MSNBC and CNBC, and Universal Studios lost money on its would-be summer blockbuster, the expensive and critically skewered “Battleship.”
Comcast bought a controlling stake in NBCUniversal a year and a half ago.
NBC is airing the Olympics in the U.S., but the event started after the end of the second quarter.
NBCUniversal CEO Steve Burke said the network is set to “break even” on the Olympics, contrary to previous expectations of a $200 million loss.
The network had said that ad sales have topped $1 billion, a record for the Olympics.
The accounting basis for Burke’s remark was unclear; Comcast CFO Michael Angelakis said that because NBC signed the contract with the Olympics committee before Comcast took control, purchase accounting has wiped out much of the loss. The company expects to post a small gain from the event in the third quarter, Angelakis said.
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