Comcast Corp. suffered its largest quarterly loss of cable television subscribers in three years, underscoring the pressure on traditional TV players as new entrants heighten the competition for customers.
The cable giant's results for the September quarter come as AT&T Inc. and Charter Communications Inc. also reported continued declines of pay-TV subscribers in their latest quarters.
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Comcast lost 125,000 residential and business TV customers, a drop roughly four times higher than the second quarter. A year earlier, it reported a gain of 32,000 customers. The company said the spate of major hurricanes in the quarter cost it about 20,000 video subscribers.
But larger forces are at work as well. Traditional pay TV providers are losing subscribers to new, more affordable online channel bundles as well as streaming services like Netflix Inc.
Comcast also said it was monitoring more aggressive competition from traditional rivals, who are responding to the growth of the streaming players and making their own investments. AT&T has been expanding its own ultrafast fiber internet service in new markets.
Despite such concerns, Comcast on Thursday reported growth in its internet access business and beat Wall Street profit estimates.
"Our broadband business is increasingly the epicenter of our relationship with customers," Comcast Chief Executive Brian Roberts said on a call with analysts.
Comcast shares edged down in recent trading.
Charter, whose shares were down 7% in recent trading, shed 104,000 television customers in its latest quarter, the company's sixth-consecutive quarterly decline. Still, it saw 249,000 new internet subscribers.
Comcast said the new cellphone service it launched this year to help boost its internet service business has more than 250,000 customer lines. Every mobile subscriber isn't currently profitable, but Comcast said that should change as the service scales. The cable operator is relying on a five-year-old network-resale agreement with Verizon Communications Inc.
Comcast and other cable providers stand to benefit on the internet access side of their business as streaming TV subscriptions and usage increase.
On a call with analysts, Comcast said the shift from video to internet could lead to higher profit margins. Its stand-alone internet service is more expensive than as part of a bundle and costs the company less proportionally.
"As this shift is occurring, the utility of broadband to the consumer is going up every year," Mr. Roberts said.
Comcast gained 214,000 internet customers in the quarter, down from the 330,000 gained in the year-earlier period.
Total revenue per customer relationship increased 2.1%. Overall revenue for Comcast's cable division, which makes up 62% of the top line, rose 5.1% to $13.2 billion.
At the NBCUniversal media division, revenue and profits had tough comparisons with last year, when the company's networks aired the 2016 Olympic Games. Revenue in the division fell 13% to $8.01 billion, with declines in both the broadcast television and cable networks divisions. Revenue rose 6% excluding the impact of the Olympics.
Advertising revenue was hurt by the lack of Olympics advertising and less political-related spending due to the election cycle last year.
Revenue in the filmed entertainment division fell 0.5% as there were no megahits in the quarter. Still, the company's release of "Despicable Me 3" highlighted its focus on growing the size of its franchise business, which provides revenue beyond a movie's theater run.
Theme parks revenue increased 7.7%, driven by new attractions in Japan and Orlando, Fla. The company also highlighted opportunities in China, saying it could eventually see more than $1 billion in annual revenue there when a Beijing theme park opens.
In all, net income rose to $2.65 billion, or 55 cents a share, up from $2.24 billion, or 46 cents a share, a year earlier. On an adjusted basis, earnings per share came in at 52 cents.
Revenue fell 1.6% to $20.98 billion but adjusted revenue, excluding the impact of the Olympics, grew 5.8%.
Analysts polled by Thomson Reuters projected adjusted earnings of 50 cents a share on $21.04 billion in revenue.
Write to Austen Hufford at firstname.lastname@example.org
(END) Dow Jones Newswires
October 26, 2017 12:26 ET (16:26 GMT)