Comcast’s growth in broadband customers offsets fourth-quarter cord-cutting

Comcast Corp’s bid to counter cord-cutting with profitable broadband customers continued to pay off in the fourth quarter, as the company on Thursday beat Wall Street’s revenue and profit estimates.

The Philadelphia-based cable company reported fourth-quarter revenue of US$28.4 billion, beating the Wall Street consensus estimate of US$28.17 billion, according to IBES data from Refinitiv.

Revenue growth was aided by British pay-TV group Sky, which the company acquired for US$39 billion in 2018. The business generated fourth-quarter revenue of US$5.04 billion, beating the average estimate of US$4.82 billion.

Comcast continued to lose cable TV subscribers as viewers flocked to streaming services, but those losses happened at a greater rate than Wall Street expected. Even so, it beat the Wall Street consensus estimate for revenue from video subscribers.

It lost 149,000 video customers, more than a loss of 139,000 estimated by research firm FactSet, but fewer than the 238,000 video customers it lost in the third quarter.

Comcast has been vocal about its effort to chase broadband customers to offset cord-cutting, as viewers who stream TV and film require a broadband connection to do so.

The company gained 442,000 broadband subscribers in the quarter, beating analysts’ average estimate of 378,000 net additions, according to FactSet. Revenue from that business grew 8.8 per cent to US$4.79 billion.

Comcast will be making its own entrance into the streaming video war on Apr 15, when it launches its advertising-supported Peacock streaming service to Comcast customers, followed by a launch across the United States on Jul 15.

Peacock will offer next-day access to current NBC series, as well as the entire catalog of shows such as “Cheers,” “30 Rock,” and “Saturday Night Live” and classic movies like “Jaws” and “Jurassic Park.”

For the fourth quarter Comcast’s NBCUniversal segment, which includes NBC Entertainment and Universal Pictures, reported revenue of US$9.15 billion, down 2.6 per cent from a year earlier.

Revenue at the filmed entertainment unit fell 21 per cent from the same quarter a year earlier, hurt by the disappointing performance of the Universal Pictures film “Cats”.

Net income attributable to Comcast rose to US$3.16 billion, or 68 cents per share, from US$2.51 billion, or 55 cents per share, a year earlier.

Excluding items, the company earned 79 cents per share. Analysts on average had estimated the company to earn 76 cents.

Comcast increased its dividend by 10 per cent to US$0.92 per share on an annualised basis for 2020.