Growth in cable and internet customers and the box office strength of films, including the latest instalment in the Fifty Shades of Grey series, powered better than expected quarterly revenue and profit at Comcast.
Net income at the largest US cable group, which owns the NBC TV networks and the Universal Pictures film studio, jumped 20 per cent to $2.6bn, or 53 cents a share, in the first quarter, up from $2.1bn, or 42 cents a share, a year ago. Wall Street analysts had expected earnings of 45 cents, according to S&P Global Market Intelligence.
Revenue rose 9 per cent to $20.5bn, ahead of analysts’ forecasts of $20.1bn. In the cable and internet business, Comcast’s biggest division, revenue increased 6 per cent to $12.9bn.
Its shares rose 2.5 per cent to $39.78 in pre-market trading in New York.
Comcast has shown resilience in the face of increasing competition from online video services. It added pay-TV customers last year, for the first time in a decade, and has been investing in technology and customer service to woo consumers. Half of the company’s residential pay-television subscribers are now using its high-tech X1 set-top box.
The company gained 297,000 subscribers in the first three months of the year, up from 271,000 customers in the same period a year ago. It added both video and high-speed internet subscribers, although growth, of 42,000 and 429,000 respectively, was slower than a year ago.
However, Comcast lost a net 5,000 subscribers to its voice service, including 27,000 residential customers, underlining the shift from landline telephones to mobile devices. Earlier this month, in a bid to boost customer loyalty, Comcast launched a new wireless operator.
“We believe including mobile in our bundles will ultimately improve retention,” Brian Roberts, chief executive, told analysts on a conference call. He said Comcast would take a “disciplined approach” to the wireless business.
In an industry where the competitive landscape is being reshaped by dealmaking, from AT&T’s $85bn bid for Time Warner to Verizon’s recent absorption of AOL and Yahoo, Comcast has been touted as a possible buyer for T-Mobile USA, the country’s fastest-growing mobile phone network. Verizon’s chief executive recently said he would be open to deals with big media companies, naming Comcast as a possible partner.
At NBCUniversal, revenue rose 15 per cent to $7.9bn and adjusted earnings grew 24 per cent to $2bn. That was led by gains at the film studio, where revenue jumped 43 per cent to $1.98bn and adjusted earnings more than doubled to $368m, powered by the success of Fifty Shades Darker, the thriller Split and the horror-comedy Get Out.
Comcast benefited from a comparison with 2016’s relatively weak slate of movie releases, which resulted in a 13 per cent decline in film revenues last year. This year’s offerings are expected to be stronger. The Fate of the Furious, the eighth film in The Fast and The Furious franchise, took in a record-smashing $532.5m at the global box office on its opening weekend earlier this month and is on its way to passing $1bn.
Revenues at NBC’s cable and broadcast networks were boosted by higher fees paid by cable providers to carry the channels. The cable division, which includes MSNBC and Bravo, saw revenue rise 8 per cent to $2.6bn, while broadcast revenues were up 6 per cent to $2.2bn. However, advertising sales fell 3 per cent at the cable channels and were up just 0.3 per cent for broadcast.
Revenue at theme parks rose 9 per cent to $1.1bn, as Comcast bought the remaining 49 per cent of Universal Studios Japan it did not already own for $2.3bn.