July 27, 2016 / 11:15 AM / 3 years ago

Comcast profit drops on film sales, beats Wall Street estimates

NEW YORK (Reuters) - Comcast Corp (CMCSA.O) reported a 5 percent drop in quarterly earnings on Wednesday, hurt by lower film division sales, but managed to beat Wall Street expectations due to growth in its business services and high-speed internet units.

The NBC and Comcast logo are displayed on top of 30 Rockefeller Plaza, formerly known as the GE building, in midtown Manhattan in New York July 1, 2015. REUTERS/Brendan McDermid/File Photo

The company also lost fewer pay-TV subscribers than expected and gave an optimistic outlook for television advertising during the upcoming Olympic Games in Rio de Janeiro.

Shares of the largest U.S. cable and high-speed internet provider were up about 1.1 percent at $67.92 in afternoon trading after hitting an all-time intraday high of $68.32 earlier in the day.

To hold cable subscribers back from switching to lower-priced video streaming services such as Hulu, Philadelphia-based Comcast has been investing to improve customer service and enhance the capabilities of its set-top boxes and TV interface. It plans to let customers stream Netflix Inc’s (NFLX.O) online content through its X1 cable-TV service in coming months.

Comcast lost 4,000 pay-TV subscribers in the second quarter, far less than the year-earlier loss of 69,000.

The latest figure was much better than “what was already an optimistic StreetAccount consensus of a loss of 31,000 subscribers,” MoffettNathanson analyst Craig Moffett said in a research note.

Cable revenue rose 6 percent to $12.44 billion from a year earlier.

Total revenue increased 2.8 percent to $19.27 billion, slightly above the analysts’ average estimate of $18.99 billion, according to Thomson Reuters I/B/E/S.

Net income fell to $2.03 billion, or 83 cents per share, from $2.14 billion, or 84 cents per share. Analysts were expecting 81 cents a share.

Revenue jumped 17 percent to $1.36 billion for business services.

Internet revenue increased 8.6 percent to $3.37 billion as customer additions rose 22.3 percent to 220,000.

Revenue from the NBCUniversal division, which includes the NBC television network, film studios and theme parks, fell 1.8 percent to $7.1 billion. NBCUniversal expects gains in ad sales in the second half of 2016 from the Rio Olympics, which start Aug. 5.

The unit made about $120 million in profit from the 2012 London Games, “and we are going to make a lot more than that in Rio,” NBCUniversal Chief Executive Officer Steve Burke said on a conference call.

The Universal film studio’s revenue slid 40 percent to $1.35 billion due to weak sales from releases including “The Huntsman: Winter’s War” and “Warcraft.” A year earlier, the studio delivered summer blockbusters “Furious 7” and “Jurassic World.”

Revenue at Universal theme parks rose 47 percent to $1.14 billion, boosted by Harry Potter attractions.

Reporting by Malathi Nayak; Editing by Bill Rigby and Lisa Von Ahn

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