(Reuters) - Comcast Corp’s (CMCSA.O) second-quarter profit on Thursday beat Wall Street estimates as it added more high-speed internet customers, but it lost more video and phone customers than expected.
Overall revenue missed analyst estimates. Revenue from NBCUniversal’s cable networks, filmed entertainment and theme parks also fell short of expectations in the seasonally weaker quarter.
The Philadelphia-based company’s shares were down 0.7% in early trading.
It beat profit estimates for at least the ninth consecutive quarter.
Comcast is adapting to changes in consumer behavior as more people drop their cable television subscriptions in favor of streaming services like Netflix Inc (NFLX.O). It is pursuing higher-margin internet customers rather than unprofitable video subscribers.
“For years, we’ve felt that video over the internet is more friend than foe,” said Comcast Chief Executive Officer Brian Roberts. “We believe it plays to our strengths.”
Comcast said it lost 224,000 video customers in the quarter, more than the 121,000 it lost in the preceding quarter and topping the loss of 178,000 estimated by analysts, according to research firm FactSet.
“There is a growing tension between the fortunes of the cable business and NBCU,” said Craig Moffett, an analyst at MoffettNathanson. “The Cable segment is now benefiting from faster video subscriber losses; remarkably, faster video subscriber losses are now a foundation of the bull case. But there is no way to spin faster video subscriber losses at Cable as anything other than bad news for NBCU.”
Revenue from Comcast’s high-speed internet business grew 9.4% to $4.66 billion in the second quarter as the company gained 209,000 subscribers. The net subscriber additions were slightly ahead of the average analyst estimate of 208,000, according to FactSet, but were down from 260,000 in the same period a year earlier.
Revenue at the NBCUniversal business, which includes NBC Entertainment and Universal Pictures, fell 0.8% to $8.21 billion.
The company is planning to launch an advertising-supported TV streaming service in April 2020, which will be free for NBCUniversal’s pay-TV customers as well as Sky customers internationally.
Revenue in Comcast’s filmed entertainment unit fell nearly 15% to $1.46 billion, reflecting a slate of films that underperformed compared to last year’s blockbuster “Jurassic World: Fallen Kingdom”.
Theme park revenue grew 7.5% to $1.46 billion, while revenue from broadcast television rose 0.5% to $2.4 billion.
The British pay-TV group Sky, which Comcast bought last year, generated revenue of $4.83 billion.
Net income attributable to Comcast fell to $3.13 billion, or 68 cents per share, from $3.22 billion, or 69 cents per share, a year earlier. Excluding items, the company earned 78 cents per share, beating estimates of 75 cents per share, according to IBES data from Refinitiv.
Comcast reported revenue of $26.86 billion on a pro-forma basis, which fell short of Wall Street expectations of $27.06 billion.
Reporting by Helen Coster in New York and Munsif Vengattil in Bengaluru; Editing by Leslie Adler and Nick Zieminski