Comcast says its profits rose 23.9 percent in the second quarter, driven in part by the box office success of Fate of the Furious and growth at its theme parks. But the company’s cable division also reports 34,000 video subscribers lost in the same period.
The entertainment and cable giant’s consolidated revenues rose 9.8 percent to $21.16 billion. Earnings per share of 52 cents beat expectations of 48 cents.
On the cable end, Comcast’s results beat or were largely in-line with estimates “on virtually every important dimension,” MoffettNathanson analysts report.
Cable revenues grew by 5.4 percent to $13.1 billion in 2Q, spurred mainly by increases in broadband, video, and business services revenues.
However, Comcast reports it lost 34,000 video subscribers, compared to 21,000 in the year-earlier period. Despite this, video revenue grew by 3.9 percent year over year to $5.79 billion, reflecting rate adjustments and an increase in the number of customers subscribing to additional services – otherwise known as the bundling effect.
Broadband revenues were also up, increasing by 9.2 percent to $3.67 billion, due to more residential high-speed internet customers and rate adjustments. Voice revenues fell by 4.1 percent to $856 million, compared to a decrease of 3.7 percent in Q1.
Comcast’s also had strong business services results, with revenue growing 12.6 percent to $1.53 billion.
In the second quarter total customer relationships grew by 114,000 to 29 million. The company added 175,000 net broadband customers, leaving Comcast’s subscriber base 5.5 percent larger than a year ago.
Only programming costs are growing faster than overall revenues, MoffettNathanson notes. Technical and product support, which includes delivery and support of Comcast’s X1 platform, cloud DVR technology, and wireless gateways, increased 1.8 percent. This is a sharp slowdown from the 6 percent growth rate six months prior.
While some say Comcast should find a merger partner, MoffettNathanson analysts disagree, noting the company’s continued strong results.
“As we observed three months ago, with its current set of assets, it must surely be conceded that Comcast needs a deal less than any company in our coverage,” the analysts conclude.
