Comcast reported that its earnings rose to $1.7 billion from $1.35 billion, or to 65 cents a share from 50 cents a share, in the period a year earlier. The results surpassed analysts’ already sunny earnings projections of 63 cents a share.
Comcast’s strong quarter was spurred by its broadband Internet business and by a rebound, albeit a tepid one, of the NBC broadcast network. This was the first quarter in which Comcast owned 100 percent of NBCUniversal, the network’s corporate parent; it had previously held a 51 percent stake.
The earnings release was celebrated by Wall Street on Wednesday morning, sending Comcast’s stock up more than 5 percent. It closed at $45.08, almost achieving a record high.
After the closing bell, Comcast was joined by the CBS Corporation, the owner of the CBS broadcast network, which reported its highest quarterly profits ever. Earnings there rose to $472 million, or 76 cents a share, from $427 million, or 65 cents a share, in the period a year earlier.
“Double-digit revenue growth — and the best quarterly profits we’ve ever had — add up to a phenomenal quarter for CBS,” the company’s chief executive, Leslie Moonves, said in a statement. On a Wednesday afternoon conference call, the company’s executive chairman, Sumner M. Redstone, who comes up with new ways to praise Mr. Moonves to investors seemingly every quarter, used the term “supergenius.”
CBS’s performance was attributed in part to content licensing deals with online streaming services like Amazon, which has been running repeats of the network’s newest program “Under the Dome” this summer. The company, which has historically depended more on advertising revenue than its peers have, said it had a 22 percent increase in revenue from content licensing and distribution; Mr. Moonves’s statement mentioned that “our non-advertising revenue sources are having a bigger impact on our results all the time.”
The healthy results from both companies may augur more good news when other networks report in the weeks to come.
At Comcast, revenue for the NBCUniversal division — which includes the NBC network, a wide array of cable channels, a movie studio and other assets — was up 8.9 percent year-over-year, to almost $6 billion. Michael McCormack, a media analyst for Nomura, said in a note to investors that NBCUniversal’s performance exceeded expectations, “with filmed entertainment and broadcast television revenue offsetting weaker-than-expected theme parks revenue.”
NBC’s cable channels, including USA, Syfy and Bravo, posted a 7.7 percent increase in revenue, to $2.41 billion in the quarter. Its somewhat smaller broadcast business, which has been undergoing a reorganization, had a 11.6 percent increase, to $1.73 billion. Mr. McCormack attributed the broadcast unit’s gains to “better ratings and higher retransmission consent fees.”
Comcast executives specifically credited “The Voice,” the singing competition on NBC that has given the network some much-needed momentum.
Distribution, not content, remains the biggest part of Comcast’s business. Revenue for the distribution business, called Comcast Cable, was up 5.8 percent year-over-year, to about $10.5 billion, partly because it added 187,000 broadband subscribers in the second quarter.
Comcast has been losing television subscribers to DirecTV and Verizon FiOS for years, and it lost another 159,000 in the second quarter. But the rate of loss has slowed lately, a point the company emphasized again on Wednesday. The company squeezed a 2.7 percent revenue gain from its TV business, largely through rate increases and from subscribers who chose more expensive packages.
“Cable had outstanding growth, particularly in high-speed Internet, and NBCUniversal had strong performance across all of its businesses,” Brian L. Roberts, the chief executive of Comcast, said in a statement.
Article source: http://www.nytimes.com/2013/08/01/business/media/2-media-companies-announce-big-gains-in-profit.html?partner=rss&emc=rss
Document: Earnings release (PDF)