Comcast profit drops on film sales, beats Wall Street estimates

[July 27, 2016]  By Malathi Nayak

NEW YORK (Reuters) - Comcast Corp reported a 5 percent drop in quarterly profit on Wednesday, hurt by lower film division sales, but managed to beat Wall Street expectations due to growth in its business services and high-speed internet units.

The largest U.S. cable operator posted total revenue of $19.27 billion in the quarter ended June 30, up 2.8 percent from a year ago and slightly surpassing analysts' consensus estimate of $18.99 billion, according to Thomson Reuters I/B/E/S.

Its net income was $2.03 billion, or 83 cents per share, compared with $2.14 billion, or 84 cents per share, in the year-ago quarter. That beat analysts' average estimate of 81 cents.

Philadelphia-based Comcast lost 4,000 pay-TV subscribers in the quarter, but that was less than a loss of 69,000 video customers a year ago.

To keep cable customers from switching to lower-priced video streaming services such as Hulu, Comcast has been investing to improve customer service and enhance capabilities of its set-top boxes and TV interface. In early July, it said it will let customers stream Netflix Inc's online content through its X1 cable-TV service in coming months.

Comcast's cable business revenue rose 6 percent to $12.44 billion from a year ago. Its business services unit posted $1.36 billion in revenue, up 17 percent.

The company, which is also the largest U.S. high-speed internet provider, said internet revenue grew 8.6 percent to $3.37 billion, as customer additions rose 22.3 percent to 220,000.

Overall revenue in its NBCUniversal division, which includes news cable networks NBC and Telemundo, film studios and theme parks, fell 1.8 percent to $7.1 billion.

The NBC and Comcast logo are displayed on top of 30 Rockefeller Plaza, formerly known as the GE building, in midtown Manhattan in New York July 1, 2015. REUTERS/Brendan McDermid/File Photo

NBCUniversal is expected to see gains in ad sales in the second half of 2016 from the Rio Olympic Games, which start Aug. 5.

Revenue at its Universal film studio, which saw weak sales from its releases, including "The Huntsman: Winter's War" and "Warcraft", slid 40 percent to $1.35 billion from a year earlier, when it delivered summer blockbusters "Furious 7" and "Jurassic World."

Revenue at Universal theme parks soared 47 percent to $1.14 billion, boosted by attractions such as "The Wizarding World of Harry Potter" in its Orlando, Florida and Los Angeles parks and the addition of Universal Studios Japan. Comcast bought a majority stake in the Japanese studio for $1.5 billion last year.

Shares of Comcast closed at $67.18 on Nasdaq on Tuesday.

(Reporting by Malathi Nayak; Editing by Bill Rigby)

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