Comcast Corp.'s entertainment unit surged in the second quarter, helped by the strong box-office performance of "The Fate of the Furious," lifting profit and revenue even as cable video subscriber losses ticked up.
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At the NBCUniversal media division, revenue rose 17% to $8.33 billion. Revenue in the filmed entertainment division jumped 60%, thanks to the latest installment of the "Fast and the Furious" franchise.
The cable networks and broadcast TV units grew revenue and earnings due to increases in subscription fees from pay TV providers, but both also saw a decline in ad sales because of ratings softness. Cable networks' ad revenues declined 0.9% to $906 million, while broadcast TV ad revenue declined 1.2% to $1.27 billion.
In the cable business, the company lost 34,000 residential and business video customers, compared with a loss of 4,000 in the same quarter last year.
Comcast has generally managed to withstand the turmoil in cable TV from cord-cutting better than some peers in pay television. In a tough environment, with consumers gravitating to streaming services such as Netflix, Amazon, Hulu and Sling TV, the company has added net video subscribers in five of the past seven quarters. The cord-cutting has taken a toll on TV ratings, however, for NBCUniversal's channels just like those of many other media companies.
Comcast and industry analysts point to its investment in X1, a cloud-based, set-top box system, as a reason its video business has held up. The company said that 55% of its residential video customers now have X1, up from nearly 40% in the same quarter last year.
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Meanwhile, Comcast and other cable providers stand to benefit on the internet access side of their business as streaming TV subscriptions and usage increase. Comcast added 175,000 total internet customers in the second quarter, down from 220,000 in the year-earlier period.
Total revenue per customer relationship, Comcast's unit revenue figure for its cable division, increased 2.2% to $151.19.
Comcast lost 22,000 voice customers in the quarter, compared with an addition of 64,000 in the year-ago quarter.
Overall revenue for Comcast's cable division, which makes up 61% of revenue, rose 5.5% to $13.12 billion.
Comcast recently launched a new wireless service, aimed at adding a fourth pillar to the typical television-phone-internet bundles. The mobile service is only for customers who subscribe to at least its internet service already.
The cable operator is relying on a five-year-old network-resale agreement with Verizon Communications to offer its service. Comcast, along fellow cable provider Charter Communications Inc., has explored a deal with Sprint Corp. that could provide an alternative reseller arrangement, potentially with better terms, people familiar with the matter have said.
Comcast has signaled that it views the wireless service as an add-on for its customers, aimed at increasing profits and reducing the percentage of customers leaving its service.
In all, net income rose to $2.51 billion, or 52 cents a share, up from about $2.03 billion, or 41 cents a share, a year ago. Revenue grew 9.8% to $21.17 billion.
Revenue and profit exceeded estimates from analysts, who were projecting earnings of 48 cents a share on $20.86 billion in revenue, according to Thomson Reuters.
Write to Austen Hufford at email@example.com
(END) Dow Jones Newswires
July 27, 2017 06:16 ET (10:16 GMT)