Despite ‘Battleship’ bomb, Comcast increases 2nd-quarter profit
Comcast Corp. didn’t allow the “Battleship” dud at the box office to sink the company’s second-quarter earnings, which once again were buoyed by strong growth in high-speed Internet subscribers.
For the quarter ending June 30, the Philadelphia-based cable television company reported net income of $1.35 billion, or 50 cents a share, compared with $1.02 billion, or 37 cents a share, for the same period last year. The earnings beat Wall Street estimates.
Revenue for the sprawling operation grew 6% to $15.2 billion, compared with $14.3 billion in the second quarter of 2011.
The company lost 176,000 cable subscribers during the quarter, an improvement of 26% over last year. Meanwhile, Comcast saw an increase of 156,000 high-speed Internet customers, helping the Internet service division become the biggest contributor to profits.
Comcast Cable, which includes cable TV, high-speed Internet and telephone services for homes and businesses, contributes 86% of the company’s overall income.
“The cable division sparkled in Q2 ... and the peacock lays an egg,” wrote Bernstein & Co. senior analyst Craig Moffett in a research report.
Comcast’s NBCUniversal navigated through choppy waters, with the Los Angeles film studio and the NBC broadcast television division each logging decreases in revenue. Universal Pictures lost $83 million during the quarter, largely due to the poor performance of its big-budget movie “Battleship,” directed by Peter Berg.
“Unfortunately, the picture in the programming business is less appealing,” Moffett wrote. “Aggregate revenue growth was marginally negative, with notable misses in every division except, ironically, Filmed Entertainment, where the bar was set so low that they were able to clear it.”
For the quarter, NBCUniversal generated $5.5 billion in revenue. Operating cash flow shriveled 15% to $982 million. NBCUniversal produced $1.1 billion in free cash flow. Comcast owns 51% of the New York-based media company, while previous owner General Electric Co. holds a 49% stake.
The profitable NBCUniversal cable television networks, including USA Network, Bravo and mun2, generated $2.25 billion in revenue, an increase of 3%, and $788 million in operating cash flow, a decrease of 6.8%.
Broadcast television, including the NBC network and affiliated TV stations, brought in $1.54 billion (down 9%) and $196 million in operating cash flow (an increase of 2.7%).
Universal Pictures generated $1.23 billion (down 1.8%) and an operating loss of $83 million. The studio also had tough comparisons with the previous year because of the wildly successful movie “Bridesmaids,” which was released during the second quarter of 2011.
Theme parks continue to be a bright spot, fueled by increased attendance because of the continued popularity of the Harry Potter attraction in Orlando, Fla., and the Transformers ride, which opened in May in Los Angeles. The unit produced $539 million in revenue (up 3.4%) and operating cash flow of $235 million, an increase of 4.2%.
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