Comcast 3Q Profit Declines, Still Beats Street
Comcast, the nation's largest TV and Internet provider, on Tuesday posted a drop in third-quarter earnings that was milder than expected. Its NBCUniversal media subsidiary overcame the absence of Olympics programming with better movies like "Despicable Me 2" as well as upbeat theme park revenue.
On the pay TV side, 876,000 more consumers opted for high-definition and digital video recorder service, which costs $15.95 a month per set-top box in its home base of Philadelphia. That, combined with a price hike, helped video revenue rise, more than making up for the loss of 129,000 video subscribers in the quarter.
Comcast ended the quarter with 21.6 million video customers. It added 297,000 Internet customers to finish with 20.3 million.
Net income fell 18 percent to $1.73 billion, or 65 cents per share, from $2.11 billion, or 78 cents per share, a year ago. A year ago, the company benefited from the sale of wireless spectrum and its stake in pay TV network operator A&E. This year, one-time items canceled each other out.
The 65 cents per share profit beat the 60 cents expected by analysts polled by FactSet.
Revenue dropped 2 percent to $16.15 billion, short of the $16.25 billion analysts expected. Excluding the $1.19 billion in Olympics ad sales last year, revenue would have grown 5 percent.
Its shares rose $1.29, or 2.7 percent, to $49 in premarket trading about 2 ½ hours before the market opening.
Comcast continues to reap the benefits of its takeover of entertainment company NBCUniversal, which it began by taking a 51 percent stake for $13.5 billion in January 2011. It bought out minority owner GE for another $16.7 billion in March, five years ahead of schedule.
While NBCU revenue fell 14 percent to $5.85 billion, it would have grown 4 percent excluding the Olympics effect from the comparison.
Movie profits were helped because of the success of "Despicable Me 2," which has grossed more than $900 million in ticket sales worldwide since coming out in July. The opening of the "Transformers 3-D" ride at the Universal Orlando Resort in Florida this summer boosted attendance and spending.
Revenue from TV, Internet and voice hookups rose 5 percent to $10.49 billion.
The average revenue for every video customer per month rose 7 percent to $161.07 a month from $150.73 a year ago.
The company lost video customers in the face of rising competition from telecoms operators AT&T and Verizon, which now compete to serve about 45 percent of the 53.7 million homes and businesses that are in Comcast's service area.
That's up from 41 percent a year ago as AT&T continues to expand its footprint.