Q3 Basic-Sub Losses Improve at Comcast

Comcast continued to cut its basic-video customer losses, reporting a loss of 48,000 subscribers in the third quarter, nearly half the 81,000 it lost in the prior year and its best Q3 in nine years, while posting even stronger growth in high-speed data customer additions.

Comcast added 320,000 high-speed data customers in Q3, its best results in six years, the company said. The customer improvements led to strong financial growth in the period for its cable operations – revenue was up 6.3% to $11.7 billion and operating cash flow rose 6.4% to $4.7 billion.

UPDATES: Analyst Tom Eagan, of Telsey Advisory Group, called the results very solid and largely in-line with his expectations, with NBCUniversal performance going beyond Telsey forecasts. And Craig Moffett, principal and senior analyst at MoffettNathanson, said Comcast's two consecutive quarters of solid video subscriber numbers might prompt a re-examination of the premise that video cord cutting is a problem for the cable industry. Moffett said broadband has helped cable gain back share from satellite and telco-TV rivals, but he said investments in improved user interface and VOD libraries also are "emerging as genuine sources of competitive advantage." 

At NBCUniversal, revenue increased 20.8% to $7.2 billion and operating cash flow rose 17% to $1.7 billion on strong results from its movie studios and theme parks. At its cable networks, revenue increased 7% to $2.4 billion, driven by an 8.6% increase in distribution revenue and a 2.0% increase in advertising revenue, partially reflecting the introduction of NASCAR on our sports network, NBCSN, as well as a 17.6% increase in content licensing and other revenue. Operating cash flow decreased 3.9% to $835 million compared to $868 million in the third quarter of 2014, reflecting higher revenue, more than offset by increased sports programming costs, driven by the impact of NASCAR.

“I’m pleased to report that our businesses generated outstanding revenue and operating cash flow growth for the third quarter of 2015,” Comcast chairman and CEO Brian Roberts said in a statement. “At Cable Communications, overall customer relationships increased 156,000, a 90% improvement compared to last year, video subscriber results were the best for a third quarter in 9 years, high-speed Internet subscriber results were the best for a third quarter in 6 years, and churn across all product categories continues to improve. NBCUniversal also delivered terrific results, including another record-breaking box office quarter driven by Minions and Jurassic World, the highest summer attendance ever at our theme parks, and maintaining the #1 broadcast network ranking for the fifth summer in a row. These outstanding results from our unique portfolio of complementary businesses underscore our confidence that we are well positioned to compete, continue our strong performance and drive shareholder value.”