Comcast shares rise on internet customer, profit growth

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(Reuters) – Comcast Corp (CMCSA.O) on Thursday reported a quarterly profit that beat Wall Street estimates as it added more than expected high-speed internet customers amid its push to diversify away from pay-TV, despite shedding an increasing number of cable TV subscribers.

FILE PHOTO: The Comcast NBC logo is shown on a building in Los Angeles, California, U.S. June 13, 2018. REUTERS/Mike Blake/File Photo

Comcast, which dropped its pursuit of Twenty-First Century Fox Inc’s (FOXA.O) entertainment assets last week after a bidding war with Walt Disney Co (DIS.N), is still competing against Fox to acquire European pay-TV company Sky PLC (SKYB.L) to expand internationally and find more growth with media content.

Shares of Comcast were up 3.2 percent to $34.50 in morning trading after the results.

Chief Executive Brian Roberts said during the conference call with analysts that Comcast pulled back on its bid for the Fox assets because it believed the company could not build enough shareholder value to justify the price, which was increasing because of a bidding war with Disney.

Revenue from high-speed internet customers rose 9.3 percent to $4.26 billion during the second quarter as Comcast added 260,000 internet subscribers, beating an average estimate of 200,000 from analysts at MoffettNathanson and Macquarie.

The growth in internet connections is “more than offsetting the pressure on video and the outlook for the second half of the year is strong,” said Kevin Roe, an analyst at Roe Equity Research.

Comcast, the biggest U.S. cable provider, shed 140,000 video customers during the quarter, up from 34,000 customers in the prior-year quarter, as TV viewers move to a growing number of cheaper streaming options, such as AT&T Inc’s (T.N) newly launched WatchTV at $15.

While streaming platforms will continue to pressure Comcast’s cable TV business, it will increase demand for high-speed broadband, said Roberts during the earnings call with analysts, adding “we’re benefiting more than I think we’re losing from that additional competition.”

Net income attributable to Comcast rose 27.6 percent to $3.2 billion, or 69 cents per share, from $2.5 billion, or 52 cents per share, a year earlier.

Earnings per share excluding adjustments were 65 cents per share, up from 52 cents per share last year, beating analyst estimates of 60 cents per share, according to Thomson Reuters data.

Comcast’s revenue rose 2.1 percent from the previous year to $21.7 billion but fell short of analyst estimates of $21.86 billion.

Comcast added 204,000 Xfinity Mobile customers in the quarter. The wireless service, launched last year, is available only to Comcast internet subscribers.

Revenue from NBCUniversal was flat year on year, because of a revenue decline for its movie studios, as hit movie “Jurassic World: Fallen Kingdom” opened late in the quarter.

Reporting by Sheila Dang; Additional reporting by Munsif Vengattil in Bengaluru; Editing by James Dalgleish and Steve Orlofsky

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