NBCUniversal First-Quarter Profit Rises Helped by Super Bowl, 'Fifty Shades'

NBCUniversal CEO Steve Burke

The entertainment arm of cable giant Comcast is led by CEO Steve Burke.

Cable giant Comcast on Monday reported first-quarter results, including improved profitability figures for its entertainment arm NBCUniversal.

The entertainment company, led by CEO Steve Burke, recorded higher first-quarter operating cash flow, the profitability metric it uses, than in the year-ago period, which had benefited from the profitable Sochi Olympics. Amid the lack of Olympics revenue, NBCUniversal's quarterly revenue dropped in the latest quarter.

At its film unit, Fifty Shades of Grey was a key contributor. The Super Bowl helped broadcast TV results.

Comcast, led by chairman and CEO Brian Roberts, on Monday also reported a slight quarterly decrease in pay TV subscribers. The 8,000 drop compared with a year-ago gain of 24,000. The company, which recently abandoned its plan to acquire Time Warner Cable, ended March with 22.375 million video subscribers.

Comcast's first-quarter earnings of $2.06 billion, or 79 cents per share, rose over the year-ago period and exceeded Wall Street expectations. Revenue rose 2.6 percent to $17.85 billion. The company also added another $2.5 billion to its stock buyback program in a move expected to be cheered by investors. Comcast shares were up in pre-market trading.

"We are off to a great start in 2015," said Roberts. "At NBCUniversal, we had another excellent quarter, led by Super Bowl XLIX, which was the most-watched television program of all time, along with the tremendous box office success of Fifty Shades of Grey and the exceptional performance of The Wizarding World of Harry Potter - Diagon AlleyTM in Orlando."

He added: "We begin 2015 with great momentum and remain confident that we are well positioned with an impressive portfolio of complementary businesses to continue our strong performance and drive shareholder value."

First-quarter revenue at NBCUniversal dropped 4.0 percent to $6.6 billion. Excluding $376 million of revenue generated by the broadcast of the NFL’s Super Bowl in the first quarter of 2015 and $1.1 billion of revenue generated by the Sochi Olympics in the first quarter of 2014, revenue increased 7.9 percent though. Operating cash flow jumped 14.0 percent to $1.5 billion driven by strong growth in the theme parks and broadcast TV units and a slight film unit gain.

At the company’s cable networks, quarterly revenue fell 5.9 percent to $2.4 billion, but rose 4.9 percent when excluding $257 million of revenue generated by the Sochi Olympics in the first quarter of 2014. That included a 4.3 percent increase in advertising revenue. “Excluding a benefit from a reduction in deferred advertising revenue, advertising growth would have been stable as audience ratings declines were offset by higher prices and volume,” the company said. Cable networks operating cash flow climbed 0.3 percent to $898 million on lower programming and production costs due to the broadcast of the Olympics in the year-ago period, partially offset by lower revenue.

Broadcast TV revenue in the first quarter fell 14.2 percent to $2.2 billion. Excluding the Super Bowl in the latest quarter and Sochi in the year-ago period, revenue rose 5.5 percent, driven by a 5.5 percent increase in advertising revenue and higher retransmission consent fees. Broadcast operating cash flow increased 48.9 percent to $182 million, “reflecting lower programming and production costs due to the broadcast of the Sochi Olympics in the first quarter of 2014 and a profitable Super Bowl, partially offset by lower revenue,” the company said.

Film revenue increased 7.0 percent to $1.4 billion amid higher content licensing and home entertainment revenue, partially offset by lower theatrical revenue, but Fifty Shades helped the company’s profit performance despite higher marketing costs for another high-profile release, management said. Film operating cash flow increased 1.7 percent to $293 million amid the higher revenue, partially offset by increased marketing expenses ahead of the release of Furious 7 early in the second quarter.

NBCUniversal’s theme parks unit saw first-quarter revenue jump 33.7 percent to $651 million due to higher attendance and increased per-capita spending, driven by the continued success of Orlando’s The Wizarding World of Harry Potter – Diagon Alley. Operating cash flow growth of 54.6 percent to $263 million outperformed all other units. The strong growth came due to the higher revenue, partially offset by an increase in operating costs to support the new attractions.

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