Comcast first quarter profit beats Wall Street, misses on revenue

April 25, 2019

By Helen Coster and Arjun Panchadar

(Reuters) – Comcast Corp reported first-quarter profit on Thursday that beat Wall Street estimates, boosted by strong additions of high-speed internet customers in a quarter that painted another mixed picture for the biggest U.S. cable provider.

Overall revenue missed analyst estimates and Comcast lost more video and phone customers than expected. Revenue from NBCUniversal’s cable networks, filmed entertainment and theme parks also fell short of expectations.

Like others in the cable television industry, Comcast is grappling with the appeal to customers of rival offerings from Alphabet Inc’s YouTube TV and subscription video services like Netflix Inc.

Earlier this week AT&T Inc and Verizon Communications Inc both reported losing more video customers than analysts expected.

AT&T shed a net 544,000 premium TV subscribers, a category that includes DirecTV satellite and U-verse television, while Verizon lost 53,000 Fios video customers.

Philadelphia-based Comcast said it lost 121,000 video customers in the quarter, more than the 29,000 it lost last quarter and the 109,000 estimated by analysts, according to research firm FactSet.

In response, the company is striving to build new services on top of its broadband network, and revenue from the high-speed internet business climbed 10 percent to $4.58 billion in the first quarter as it added 375,000 subscribers.

Those net subscriber additions beat the average analyst estimate of 356,000, according to FactSet, but were down slightly from 379,000 in the same period a year earlier.

Comcast is betting that its redesigned Xfinity X1 cable box, which allows users to find content across live TV, on-demand and streaming services like Netflix on a single menu, will help retain and attract subscribers.

Revenue at its NBCUniversal business, which includes NBC Entertainment and Universal Pictures, dropped 12.5 percent to $8.31 billion.

In January NBCUniversal announced it will launch an advertising-supported TV streaming service in 2020, which will be free for NBCUniversal’s pay-TV customers as well as Sky customers internationally.

Filmed entertainment revenue rose 7.4 percent to $1.77 billion, boosted by movies including “How to Train Your Dragon: The Hidden World” and “Us” while theme park revenue slipped 0.4 percent to $1.28 billion.

Revenue from broadcast television dropped 29.4 percent to $2.47 billion, though the company also broke out figures that showed revenue rose when excluding 2018 Olympics and Super Bowl from the prior-year comparison.

Comcast, which bought the British pay-TV group Sky last year, said revenue reported from Sky was $4.8 billion.

Net income attributable to Comcast rose to $3.55 billion, or 77 cents per share, from $3.12 billion, or 66 cents per share a year earlier. Excluding items, the company earned 76 cents per share, beating estimates of 68 cents per share, according to IBES data from Refinitiv.

Comcast’s overall revenue rose 18 percent to $26.86 billion, but fell short of Wall Street expectations of $27.20 billion.

(Reporting by Helen Coster and Arjun Panchadar)

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