With cable-TV at saturation levels and more young people opting for a combination of Netflix (NFLX) and something else, Comcast needs to continue to add broadband subscribers.
And the Philadelphia-based cable-TV provider appears to be doing that. New broadband subscribers exceeded forecasts pushing the company's total number of high-speed Internet customers nationwide to 19.98 million in the second quarter. Shares were surging 5.6% to $45.11.
Comcast also got more than expected out of NBCUniversal.The NBC broadcast network posted a 13% increase in upfront advertising sales in the three months ended June 30, adjusted for Olympic ad sales a year earlier as well as ratings increases that were also the best in nine years. The company's cable-TV channels, which include the CNBC, Bravo and USA networks, were able to secure advertising-rate hikes of 7% to 8%, CEO Brian Roberts said in a conference call with investors. Comcast's second-quarter earnings supported the thesis that Robert continues to effectively make the transition to emphasizing broadband services over cable-TV subs. Time Warner Cable (TWC), which reports its second-quarter numbers on Thursday, is hoping to be so fortunate. Net income at Comcast rose 29% to $1.73 billion, or 65 cents a share, in the second-quarter from $1.35 billion, or 50 cents, a year ago. Those numbers easily surpassed the average analyst estimate in a Bloomberg survey which called for net income of $1.69 billion, or 63 cents a share. "This was the best second-quarter in 5 years," Marci Ryvicker, a Wells Fargo media analyst, said in a note to investors. "There was no promotional activity to call out here, so sounds like it is organic execution." Ryvicker has an "outperform" rating on Comcast. The jump in high-speed Internet subscribers was punctuated by a more than 20% gain in new small-and-medium-sized business customers. Comcast, which gets 64% of its revenue from its cable and broadband services, got a big boost from NBCUniversal, where The Voice, the singing-competition show, helped lift sales 7% to $16.3 billion, beating the average analysts' estimate of $16 billion. NBCUniversal accounts for the remaining 37% of sales. Overall, NBCUniversal revenue increased 8.9% in the quarter to $6 billion. NBCUniversal also includes the movie studio Universal Pictures and various theme parks. Written by Leon Lazaroff in New York >To contact the writer of this article, click here: LeonLazaroff.>.