NEW YORK, N.Y. – The decision by Comcast Corp., the country’s largest cable company, to buy General Electric out of the NBCUniversal business looks like a smart one, as the media conglomerate posted strong results for the second quarter.
It was the first quarter in which Philadelphia-based Comcast owned all of NBCUniversal, the parent of the NBC broadcast network and Universal Studios. Comcast bought control of NBCUniversal in 2011, with an agreement to buy the remaining GE stake over time. It sped up the schedule this year, buying out GE on March 19 for $16.7 billion.
NBCUniversal’s results are more volatile than Comcast’s slow-and-steady cable business. In the second quarter, it posted a 9 per cent increase in revenue to $6 billion, well above analyst estimates at $5.75 billion, as polled by FactSet. Results were driven by the release of “Fast & Furious 6” in theatres and by ad sales for top-rated broadcast TV show “The Voice.”
Coupled with continued strong performance in the Comcast cable business, NBCUniversal helped push overall results beyond Wall Street expectations.
Comcast earned $1.73 billion, or 65 cents per share, in the April-to-June period. That’s up from $1.35 billion, or 50 cents per share, in the same period a year earlier.
Overall revenue rose 7 per cent to $16.3 billion from $15.2 billion.
Analysts had expected earnings of 63 cents per share on revenue of $16 billion.
Comcast shares rose $2.37, or 5.6 per cent, to close Wednesday at $45.08.
Subscriber trends in the cable business were the best in five years for the seasonally weak second quarter. Cable companies routinely lose subscribers every quarter to satellite and phone-company TV services, but Comcast has been slowing down its losses and saw a net of only 159,000 subscribers depart in the quarter.
On the broadband side, it added a net 187,000 subscribers in the quarter, the highest figure since 2008. Other Internet service providers are seeing drastically slowing recruitment, as most homes already have broadband.
Comcast is already the country’s biggest Internet service provider, with nearly 20 million accounts.