By Shalini Ramachandran
Comcast Corp.'s second-quarter profit rose 7.3% as the movie
"Jurassic World" set box-office records and revenue at the
broadband and business services divisions grew, offsetting softness
at the company's TV networks.
For the quarter ended June 30, Comcast reported net income of
$2.14 billion, or 84 cents a share, up from $1.99 billion, or 76
cents, a year earlier. Revenue grew 11% to $18.74 billion.
Analysts were projecting earnings of 84 cents a share on $18.14
billion in sales, according to estimates from Thomson Reuters.
The cable giant has been refocusing after emerging in April from
14 months in limbo, when it walked away from the ill-fated $45
billion acquisition of Time Warner Cable because of stiff
regulatory resistance. Since then, Comcast has announced plans to
offer a new $15-a-month Web TV service dubbed "Stream" for its
Internet service customers and started testing a videogame
streaming service over its set top boxes in partnership with
Electronic Arts.
The company is trying to bolster its Internet offerings and
target younger consumers as more customers opt to cut the cable TV
cord in favor of cheaper video alternatives. In May, Comcast Cable
President Neil Smit said the company's broadband subscribers had
surpassed its video customers, a significant milestone for a firm
that grew up on selling cable TV.
Comcast shed 69,000 cable TV customers in the seasonally weak
second quarter, an improvement from the 144,000 lost subscribers a
year ago. Broadband customer growth slowed, as it added 180,000
customers, compared with 203,000 a year earlier.
While broadband subscribers may outnumber video subscribers, the
video business still brings in far more revenue even as growth
slows. Broadband revenue increased 10% to $3.1 billion, while video
sales rose 3.7% to $5.4 billion thanks to higher cable bills.
Business services revenue jumped 20% to $1.2 billion, helping
offset a 2.1% decline in voice revenue. Overall at the cable
business--which includes video, broadband and voice connections and
accounts for the bulk of Comcast's top line--revenue rose 6.3% to
$11.73 billion.
At the cable networks division, NBCUniversal's biggest segment
by sales, revenue decreased 1% to $2.45 billion. Operating cash
flow--a measure of profitability--declined 4.6% amid continued
ratings pressure. Revenue at the broadcast-TV segment, which
includes the flagship NBC network, was flat, while its operating
cash flow declined 3.7%.
Television networks have spent the past few months negotiating
with advertisers to lock in ad spending commitments for the coming
season. While any public comments about upfront ad sales are
notoriously full of posturing and fuzzy math, declines this year
are likely at least as bad as last year.
For NBCUniversal, advertising revenue at its cable networks,
which include USA, Syfy and CNBC, fell 3% in the second quarter,
while broadcast ad revenue was relatively flat with the year
prior.
Total revenue at NBCUniversal shot up 20% to $7.23 billion,
following a blockbuster quarter at the filmed entertainment
division and continued growth at the theme parks. Operating cash
flow at NBCU increased 19%.
Thanks to hits like "Jurassic World," "Furious 7" and "Pitch
Perfect 2," operating cash flow at the filmed entertainment
division more than doubled to $422 million in the second quarter.
"Jurassic World" is now third on the list of biggest box-office
hits, behind only "Avatar" and "Titanic." Cash flow at the theme
parks jumped 45% to $354 million in the quarter.
Write to Shalini Ramachandran at
shalini.ramachandran@wsj.com
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