Comcast profit surges on upbeat NBC results
Comcast Corp. said Tuesday that its first-quarter net income rose by 30 percent as ad revenue surged at broadcast network NBC, helped by the Winter Olympics in Sochi and Jimmy Fallon’s elevation as host of “The Tonight Show.”
The results beat Wall Street estimates and its shares edged up in morning trading.
Comcast is the largest cable company in the country with 22 million video customers and 21.1 Internet customers. It is in the midst of an expected yearlong review of its $45 billion acquisition of No. 2 rival Time Warner Cable Inc.
In the company’s conference call with investors, Comcast CEO Brian Roberts called the proposed deal an “exciting and unique opportunity.”
“We remain confident that the combination will strengthen a world class organization that will benefit customers, employees and shareholders,” Roberts said.
Regulators are examining whether the combination would give it undue pricing power over customers and too much leverage with programmers.
Its net income in the quarter through March rose to $1.87 billion, or 71 cents per share, from $1.44 billion, or 54 cents per share a year ago.
Excluding one-time items, adjusted earnings came to 68 cents per share, beating the 64 cents expected by analysts polled by FactSet.
Revenue grew 14 percent to $17.41 billion from $15.31 billion. That’s also higher than the $16.99 billion expected by analysts.
NBCUniversal revenue grew 29 percent to $6.88 billion while cable services revenue grew 5 percent to $10.76 billion.
Olympics broadcast rights boosted NBCU revenue by $1.1 billion. Even excluding the games, broadcast revenue rose 17 percent, helped by Fallon’s selection for NBC’s late night slot, replacing longtime host Jay Leno. The network was also boosted by more hours of “The Voice” and the popularity of new shows like “The Blacklist.”
On the cable connections side, Comcast added 24,000 video customers during the quarter, the second quarterly gain in a row following a six-and-a-half year losing streak. However, those gains are likely to come to an end in the current quarter as college students disconnect service at the end of the semester.
Comcast added 383,000 high-speed data customers and 142,000 voice customers.
The company says the roll-out of its newest X1 set-top box is starting to contribute to better video results. It is now setting up 15,000 to 20,000 boxes per day, up from 10,000 at the end of the year. An improved user interface is helping reduce customer disconnects while boosting video-on-demand spending and increasing uptake of digital video recorder service. Within three years, Comcast hopes the majority of its customers will have X1.
Comcast shares rose $1.43, or 3 percent, to $51.31 in morning trading. Its shares have fallen 4 percent in regular trading so far this year.
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