Comcast Tops Profit Forecasts as Broadband Business Grows

January 24, 2019 Updated: January 24, 2019

Comcast Corp. beat Wall Street profit and revenue estimates on Jan. 23 as its high-speed internet business grew and it lost fewer cable subscribers than expected.

Comcast’s fourth quarter showed that fears over “cord cutting” in cable services and slower broadband growth may be overstated, analysts said.

The results also reinforced why Comcast’s NBCUniversal news and entertainment arm has announced a streaming strategy that appears less disruptive to traditional television and movie businesses than services planned by AT&T Inc. and Walt Disney Co.

“We’ve always thought that the television ecosystem was healthier than maybe some people thought,” NBCUniversal Chief Executive Stephen Burke told analysts in a conference call.

NBCUniversal in January announced an advertising-supported streaming TV service that will launch in 2020.

Unlike Netflix Inc., which charges a monthly fee and is seen as a threat to traditional pay television, NBC’s streaming service will be free for its pay-TV customers. It will initially be available to about 50 million customers and expand as NBC negotiates with other pay-TV providers.

Comcast said it lost 29,000 video customers in the quarter, less than the 33,000 it lost last year and the 62,000 estimated by analysts, according to research firm FactSet. Revenue slipped 1.6 percent to $5.58 billion.

Revenue from Comcast’s high-speed internet business climbed 10 percent to $4.4 billion as the company added 351,000 net subscribers, up from 350,000 a year earlier. Still, the net subscriber additions fell short of the average analyst estimate of 356,000.

“Forgive us for wondering aloud why the market thinks cable is somehow a doomed business,” analyst Craig Moffett of MoffettNathanson, said in a report after the results. “It’s hard to imagine a better testimony to the strength and resilience of the cable model.”

On the media side, business was also growing. NBCUniversal reported a 7.1 percent rise in revenue to $9.40 billion.

Filmed entertainment revenue rose 14 percent, boosted by movies including “The Grinch,” while theme park revenue increased 3.6 percent to $1.51 billion. Revenue from broadcast television rose nearly 4 percent $3.10 billion.

Comcast, which beat Rupert Murdoch’s Twenty-First Century Fox in an auction for Sky, said revenue reported from the British pay-TV group was $4.59 billion. On an adjusted basis, revenue was $5.02 billion.

Overall, Comcast revenue jumped 26 percent to $27.85 billion in the fourth quarter. On an adjusted basis, revenue was $28.28 billion. Analysts had expected revenue of $27.55 billion, according to IBES data from Refinitiv.

Excluding items, the company earned 64 cents per share, above the average estimate of 62 cents per share.

Net income attributable to the company fell to $2.51 billion, or 55 cents per share, from $15.00 billion, or $3.17 per share, a year earlier, when it recorded a $12.7 billion one-time benefit from the U.S. tax overhaul.

By Kenneth Li & Akanksha Rana

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