Cable giant Comcast on Thursday reported improved third-quarter financials for its entertainment arm NBCUniversal.
The entertainment company, led by CEO Steve Burke, reported higher operating cash flow and revenue than in the same period last year driven by growth in the broadcast TV and theme park units, partially offset by lower film results amid tough year-ago comparisons.
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The NBCUniversal performance helped Comcast overall beat earnings expectations with a profit of $2.59 billion, up 48 percent from the year-ago period, on revenue of $16.79 billion, up 4 percent. A $724 million favorable tax adjustment helped the bottom line, but even without it, the firm beat expectations. Wall Street analysts had on average projected earnings of $1.85 billion on revenue of $16.83 billion for all of Comcast.
Comcast’s cable systems lost 81,000 video subscribers in the latest quarter on a net basis, down from a year-ago loss of 127,000. That marked the company’s best third-quarter result in seven years, management said.
At NBCUniversal, broadcast TV unit revenue and operating cash flow increased amid NBC ratings improvements. Film unit revenue and operating cash flow dropped amid a more modest film slate than in the year-ago period, which had been boosted by the theatrical success of Despicable Me 2. The latest quarter included results from such theatrical releases as Lucy, starring Scarlett Johansson, and James Brown biopic Get on Up.
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The company’s theme parks unit posted strong financial growth, while the cable networks unit grew revenue and operating cash flow only slightly.
“At NBCUniversal, we had another outstanding quarter with double-digit operating cash flow growth, driven by ratings momentum at NBC Broadcast and the successful opening of ‘The Wizarding World of Harry Potter – Diagon Alley in Orlando’,” said Comcast chairman and CEO Brian Roberts.
Broadcast TV revenue rose 7.7 percent in the third quarter to $1.77 billion, with operating cash flow up from $34 million to $142 million. The company cited “an increase in advertising revenue due to strong ratings at the NBC broadcast network, as well as higher retransmission consent fees and an increase in content licensing revenue.”
Film revenue fell 15 percent to $1.2 billion, with operating cash flow down 20 percent to $151 million. The company cited a decline in theatrical revenue, “primarily due to the strong box-office performance of Despicable Me 2 in the third quarter of 2013, partially offset by “a decrease in the amortization of film costs and reduced advertising, marketing and promotion expense due to a smaller film slate.”
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Cable networks revenue rose 0.7 percent as operating cash flow increased 1.8 percent to $868 million amid a 4.6 percent advertising revenue Theme parks operating cash flow rose nearly 17 percent to $402 million amid higher attendance and per-guest spending.
Comcast earlier this year agreed to acquire Time Warner Cable in a $45 billion deal.
Email: Georg.Szalai@THR.com
Twitter: @georgszalai
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