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 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