Comcast Third-Quarter Results Beats Earnings Expectations
The cable giant posted a 125,000 customer loss and a tough comparison with the Rio Olympics in 2016.
Comcast Corp. on Thursday reported its third-quarter financials, which included a loss of cable subscribers and a tough comparison at its entertainment arm, NBCUniversal, led by CEO Steve Burke, due to the Rio Olympics in 2016.
The U.S. cable giant beat earnings expectations as it recorded third-quarter earnings of 52 cents per share, up 13 percent from 44 cents per share in 2016. Revenue fell 1.6 percent to $20.9 billion, against a year-earlier $21.3 billion.
Analysts had expected the company to report a profit of 50 cents per share. On the cable side, Comcast lost 125,000 cable subscribers during the latest quarter, against a loss of 136,000 expected by a StreetAccount estimate.
Comcast on Sept. 7 said it expected to post a loss of 100,000 to 150,000 video customers during the third quarter as the cable giant continues to face cord-cutting pressures in the emerging digital age. Top Comcast execs during a morning analyst call addressed a growing trend toward broadband-only homes where video consumers increasingly get TV without a cable or satellite subscription.
"We've anticipated this shift. It's coming," Comcast chairman and CEO Brian L. Roberts said of the fall in the number of domestic homes that receive cable, satellite or telco TV services. To respond, he pointed to Comcast recently introducing an integrated YouTube app on its X1 set-top box.
"People are relying on the speed, the Wi-Fi coverage, the video — whether it's our video or someone else's video — so consumption has never been higher," Roberts added. The cable giant is also offering a wide variety of packaged products like mobile and home security to get broadband-only homes to upgrade to higher-margin products while still focusing on video.
So while Comcast is losing video subscribers, senior execs told analysts they continue to invest to increase broadband speeds to package more products.
On the earnings front, the NBCUniversal unit saw overall revenue fall 12.7 percent to $8 billion. Excluding $1.6 billion of revenue generated by the broadcast of the Rio Olympics last year, revenue rose 6 percent.
The film unit saw revenue fall 0.5 percent to $1.8 billion, on lower theatrical revenue. The company cited the performance of Despicable Me 3, which had a tough comparison with the third quarter of 2016, when The Secret Life of Pets and Jason Bourne were released.
Broadcast TV revenue fell 30.9 percent to $2.1 billion due to lower advertising revenue. Advertising revenue fell 45.6 percent, owing to revenue from the 2016 Rio Olympics in the prior-year period.
Theme parks revenue rose 7.7 percent to $1.6 billion, in part due to the success of The Wizarding World of Harry Potter, Comcast said.
Oct. 26, 11:45 a.m. Updated with comments by senior Comcast executives made on an analysts call.