(Reuters) - Comcast Corp (CMCSA.O) beat Wall Street profit and revenue estimates on Thursday, as the company added high-speed internet customers and lost more video subscribers than expected.
Comcast’s third quarter showed that its focus on the higher-margin broadband business - necessary to stream content - is helping to offset a decline in cable subscribers.
“Four things stood out as wrapped up the quarter: our incredible strength in broadband, the enduring popularity of our premium content, our strong global footing just one year after the Sky acquisition; and how the combination of these things puts us in a unique position to compete, including in the streaming market,” said Chief Executive Officer Brian Roberts.
Comcast shares were up 2.32% at $46.78 in premarket trading.
Revenue from the company’s high-speed internet business grew 9.3% to $4.72 billion with the gain of 379,000 subscribers in the quarter, beating analysts’ average estimate of 344,000 net additions, according to research firm FactSet.
Comcast’s results also reflected the widespread “cord-cutting” across the cable business. The company lost 238,000 video customers in the three months ended Sept. 30, higher than the 224,000 it lost in the previous quarter, above the 203,000 loss estimated by research firm FactSet.
In September Comcast announced it will offer Xfinity Flex, its streaming media set top box, and a voice remote for free to its U.S. internet-only customers. It had previously charged those customers $5 per month for the service and remote. The product is meant to make it easier for subscribers of multiple streaming services to find shows.
The company’s NBCUniversal business, which includes NBC Entertainment and Universal Pictures, reported revenue of $8.30 billion, down 3.5% from a year earlier. In April NBCUniversal is launching a streaming service called “Peacock,” which will be available as a subscription or with ads, stocked with 15,000 hours of content from the company’s library.
British pay-TV group Sky, which Comcast acquired after outbidding Twenty-First Century Fox last year, generated revenue of $4.55 billion, missing estimates of $4.75 billion. Comcast attributed that miss to tough macroeconomic conditions in the UK, Germany and Italy.
The Philadelphia company said revenue rose 21.2% to $26.83 billion, beating analysts’ average estimate of $26.77 billion, according to IBES data from Refinitiv.
Net income attributable to Comcast rose to $3.22 billion, or 70 cents per share, from $2.89 billion, or 62 cents per share, a year earlier.
Excluding items, the company earned 79 cents per share, ahead of estimates of 75 cents.
Reporting by Helen Coster in New York and Neha Malara in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama