Comcast profit drops on film sales, beats Wall Street estimates

Wed Jul 27, 2016 12:26pm EDT
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By Malathi Nayak

NEW YORK (Reuters) - Comcast Corp (CMCSA.O: Quote) 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 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: Quote) 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.   Continued...

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