- By Region
First-quarter earnings from Comcast highlighted the largest US cable network’s changing business mix, with growth in high-speed internet connections and services to business customers more than offsetting a fall in video subscribers.
Comcast reported earnings per share of 45 cents, up 32.4 per cent compared with the first quarter of last year, which included just two months’ contribution from NBCUniversal, the television and film group acquired in January 2011.
Brian Roberts, chairman and chief executive, highlighted a 439,000 net increase in high-speed internet subscribers as “significantly” outpacing competitors’ growth in broadband customers.
The smaller business services unit, with revenue up 37 per cent in the quarter, had become “a significant engine for growth”, with further opportunities to sell to mid-market companies “still largely ahead of us”.
Analysts were disappointed, however, by a 37,000 drop in video subscriber numbers. Mr Roberts said the fall reflected the impact of price increases, adding that a focus on improving technology and service should allow Comcast to make “steady progress” in attracting video subscribers.
“If investors focus on the basic video number – as they so often have in the past – they’ll be missing the forest for the trees,” Bernstein Research analysts said, highlighting Comcast’s strength in broadband, gains in average revenue per user and market share gains in business services.
Net income for the group jumped from $1.04bn to $1.45bn on revenues up 22.7 per cent to $14.9bn.
Cable revenues rose 5.7 per cent while NBCUniversal, in which
General Electric still has a minority stake, reported an 18 per cent gain in pro forma revenues, helped by $259m from airing this year’s Super Bowl, the most watched US television event of the year.
Steve Burke, the executive vice-president in charge of NBCUniversal, acknowledged that its US broadcast network, home to The Voice, was “underperforming our peers”.
If it could close the gap with ABC, CBS and Fox, there were “hundreds of millions of dollars worth of opportunity just getting to average in that business”, he said.
Increased programming and marketing costs for NBC’s primetime schedule led to an operating cash flow loss in the broadcasting business, but Comcast highlighted growth at its Universal film studio and theme parks including a Harry Potter attraction in Orlando.
Shares in Comcast closed down 0.6 per at $30.42 in New York.