Comcast defies cord-cutting trend, while ‘Sing’ and Harry Potter attraction boost NBCUniversal’s revenue
Comcast Corp. expanded its base of cable TV subscribers in 2016 for the first time in a decade and reported revenue gains in NBCUniversal’s film and TV businesses.
The Philadelphia cable giant achieved a milestone in a sea of industry turbulence, adding a net 80,000 cable TV subscribers in the fourth quarter and 161,000 for the full year — defying the trend of customer cord-cutting that has concerned Wall Street. Comcast now has nearly 23 million cable TV subscribers, gaining on rival AT&T.
The company also increased its high-speed Internet subscribers by a net of 385,000 during the October-to-December quarter, and 1.4 million for the full year.
“We are executing at an extremely high level,” Comcast Chief Executive Brian Roberts told analysts Thursday morning on a conference call.
Roberts singled out strong results from NBCUniversal, which boosted revenue 13% to $8.5 billion during the fourth quarter. Operating cash flow, the company’s measure of profitability, jumped 14% to $1.77 billion compared with a year earlier.
“At NBCUniversal, we had a fantastic year, further validating what a game-changing acquisition this was,” Roberts said.
Comcast acquired NBCUniversal six years ago from General Electric, and last year it added Glendale studio DreamWorks Animation to its portfolio.
Los Angeles-based NBC Entertainment and Universal Pictures maintained their A-list star status. The broadcast TV division, which includes the NBC network, TV stations and Spanish-language Telemundo, increased revenue by 14% to $2.8 billion.
NBC’s breakout hit drama, “This Is Us,” and NFL “Sunday Night Football” drove ratings. Telemundo also edged out archrival Univision in prime time for much of the quarter.
Universal increased its revenue 12.6% to $1.8 billion, helped by its theatrical hit “Sing” and inclusion of DreamWorks results. Universal has gotten off to a strong start in 2017 with holdover results from “Sing,” which was released just before Christmas, and its new film, “Split,” from director M. Night Shyamalan.
Theme parks, led by Universal Studios Hollywood, saw a 32% jump in revenue to $1.3 billion, boosted by the new Wizarding World of Harry Potter attraction.
Cable TV channels, including USA, Bravo, MSNBC, E! and Syfy, notched a 4% revenue gain to $2.5 billion. The unit now is the second-largest revenue engine, eclipsed by NBC broadcast. The cable channels generated three times the profit of broadcast, which has higher programming costs, including NFL football.
“I still think there is a lot of opportunity — maybe not quite as much opportunity as there was in the early days,” NBCUniversal Chief Executive Steve Burke said.
Programming expenses increased, adding to the company’s operating costs.
Overall, Comcast reported a 9.2% revenue increase in the fourth quarter to $21 billion. Net income was $2.3 billion, or 95 cents a share, compared with $2 billion, or 79 cents, in the same period last year.
Analysts were interested in Comcast’s expansion efforts, including its plan to team up with cellphone giant Verizon to offer wireless phone service or whether it would buy more TV stations. Comcast was noncommittal about its larger plans, but Wall Street is expecting a flood of mergers and acquisitions as President Trump and his administration have said they would relax regulations governing the telecommunications industry.
Comcast shares are up nearly 20% since the November election. They rose $2.06, or 2.8%, to $75.50 on Thursday.
The company also announced a 2-for-1 stock split.