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Comcast signs up more cable TV subscribers, bucking the cord-cutting trend

Comcast signs up more cable TV subscribers, bucking the cord-cutting trend
An NBC Sports production control room in Stamford, Conn., during coverage of the Rio Olympics in August. (Patrick Raycraft / Hartford Courant)

Cable television colossus Comcast Corp. gained customers in the third quarter, bucking industry trends, and its broadcast of the Rio Summer Olympics hauled in $1.6 billion in revenue.

Comcast announced Wednesday that it added a net 32,000 cable television subscribers during the July-through-September quarter, compared with a loss of 48,000 in the same quarter last year. The industry leader also gained 330,000 high-speed Internet customers, a slight increase over the year-earlier quarter. Comcast now has 28 million customers.

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Despite the solid earnings, Comcast shares slipped $1.96, or 3%, to close at $62.56 on Wednesday.

Wall Street analysts have been eager to hear whether AT&T's blockbuster $85.4-billion deal to buy Time Warner Inc. might prompt Comcast to rush out and buy a wireless phone company such as T-Mobile or Sprint to achieve the same kind of scale. Over the years, Comcast has been more acquisitive than most media conglomerates, buying entertainment company NBCUniversal in 2011 and DreamWorks Animation last summer.

Comcast Chief Executive Brian Roberts refused to take the bait. "We have a fabulous company," he said Wednesday. "The assets are great. They are working well together.… We couldn't be happier with this quarter and the momentum of this year."

Perhaps the sting of its failure to take over Time Warner Cable last year lingers. Comcast abandoned that deal in early 2015 rather than battle federal regulators who were against such a massive merger.

The results for Comcast's NBCUniversal media unit beat Wall Street expectations. Revenue soared 28% to $9.2 billion, driven by the Olympics (which included $1.2 billion in advertising revenue). Excluding Olympics money, revenue was up 5.7% compared with the third quarter of 2015.

NBCUniversal's operating cash flow increased 31.5% to $2.15 billion. Television networks and theme parks posted strong results. Broadcast and cable television networks were boosted by the Rio Olympics. Universal Studios has been welcoming more visitors, who are intrigued by the new Harry Potter attraction at its Los Angeles-area theme park. Theme parks operating income was up 62.4% to $706 million.

But the Universal Pictures movie studio had a lackluster performance: It generated $1.8 billion in revenue, down nearly 8% from the year-earlier period. That's a tough comparison, however, because  "Minions" and "Jurassic World" were practically minting money in last year's third quarter.

The studio's operating cash flow slumped 6% to $353 million. The company, however, said it was happy with the performance of Universal's third-quarter release, "The Secret Life of Pets."

Overall, earnings attributable to Comcast grew to $2.24 billion, up 12.1% from last year's third quarter. Excluding some one-time items, profit was 92 cents a share, which just topped Wall Street estimates.

Comcast revenue swelled 14.2% to $21.3 billion.

The Philadelphia company plans to roll out a branded wireless phone service in mid-2017 in a partnership with Verizon Wireless. Comcast hasn't said whether the wireless service will roll out in all of its markets,  which include San Francisco, Sacramento, Philadelphia, Chicago and Denver.

Telecommunications analyst Craig Moffett expressed frustration about speculation that Comcast might buy a phone company and about Wall Street's gleeful support for such big deals in general.

"If one views AT&T's acquisition [of Time Warner] as mere diversification, then why on Earth would Comcast feel any compunction at all to follow suit?" Moffett said in a research report. "Would it not be wise to wait to see whether there is any merit to the strategy of combining content and wireless under one roof?"

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