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Comcast profit jumps 15%, fueled by Internet service growth

Comcast grows second-quarter revenue 3.5%; profit up 15%
NBCUniversal posts a solid quarter with $6 billion in revenue; Universal film has a weak quarter

Comcast Corp.'s second-quarter profit increased 15% as more customers signed up for its high-speed Internet and phone service.

The Philadelphia cable giant generated net income of $1.99 billion, or 76 cents a share, compared to $1.73 billion, or 65 cents in the year-earlier period.

Revenue grew nearly 3.5% to $16.84 billion.

NBCUniversal posted a strong quarter, buoyed by ratings gains at the NBC broadcast network, revenue growth at its cable networks, including USA and Bravo, and increased attendance at its theme parks in Orlando, Fla., and Los Angeles.

However, Los Angeles-based film studio Universal Pictures turned in softer results due to a thinner film slate that produced 15% less revenue compared to the year-earlier period.

"In film, we had a relatively quiet theatrical quarter," Comcast Chief Executive Brian Roberts told analysts on a Tuesday morning conference call. "Our focus now is on building a strong slate in 2015 and beyond."

Company-wide, Roberts touted the company's gains in high-speed Internet and phone service sign-ups. More small businesses opted for Comcast service, an encouraging sign as Comcast seeks to expand its footprint with the acquisition of Time Warner Cable.

The period marked Comcast's best second quarter in six years for customer retention. The company lost 144,000 video customers during the quarter; its count now stands at 22.5 million video subscribers.

Meanwhile, the company added 203,000 high-speed Internet subscribers for a total of 21.3 million customers.  If current trends continue, the company will have more Internet service customers than cable TV subscribers by the end of 2015.  

The company now has 11 million phone service subscribers.

Comcast spent $44 million in costs associated with its proposed takeover of Time Warner Cable.

The company's revenue engine continues to be its cable and Internet service business with 5.4% growth to $11 billion in revenue.  Operating cash flow came in at $4.6 billion, an increase of 5.3%.

NBCUniversal generated revenue of $6 billion, an increase of less than 1%. Operating income jumped 20% to $1.4 billion.

Cable networks, including USA, Bravo and E!, increased its revenue 2.6% to $2.47 billion. The broadcast unit, which includes NBC, Telemundo and local stations, generated 4.9% higher revenue to $1.81 billion. 

The NBC broadcast network finished the TV season in first place in the important advertising demographic of viewers 18 to 49; the network's best finish in a decade.

However, film revenue declined 15.3% to $1.18 billion.  Universal Pictures squeaked out a hit in "Neighbors," with Seth Rogan and Zac Efron, but the studio had tough comparisons to the year-earlier period when it was riding high from its "Fast and Furious" film and "Despicable Me 2."  Universal also had fewer releases in the quarter.

Theme park revenue increased 12.8% to $615 million.  More patrons visited the parks, particularly during the spring holidays. During the quarter, the unit was gearing up for the opening of "The Wizarding World of Harry Potter" attraction in Orlando, which opened earlier this month.

"Since we bought the company, we have had terrific growth in cash flow," Roberts said. "With progress we have made with ratings in broadcasting, success at the upfront and the new Harry Potter attraction in Orlando, we feel that NBCUniversal is positioned to continue this momentum."

Copyright © 2014, Los Angeles Times
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