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Comcast's 'Light' Sales, LinkedIn's Moderation, Dreamworks' 'Mr. Peabody': Media Roundup

Stocks in this article: CMCSAT

Updated from 8:04 a.m. EDT

NEW YORK (TheStreet) -- Comcast (CMCSA) was falling Wednesday after the country's largest cable-TV operator reportws third-quarter sales that fell just short of analyst expectations as the company continued to lose pay-TV subscribers. Net income rose for an eighth-consecutive quarter, helped in part by a reduction in capital expenses.

Shares of the Philadelphia-based media company that also owns NBC and the Universal movie studio were dropping 1.3% to $47.11.

"This was a little bit of a mixed quarter -- revenue was a tad light," Wells Fargo media analyst Marci Ryvicker wrote in an investor note. Ryvicker rates Comcast "outperform."

Net income was $1.73 billion, or 65 cents a share, on sales of $16.2 billion. Analysts were expecting sales of $16.24 billion. Revenue comparisons for the same quarter a year ago were impacted by the summer Olympics in London, carried by NBC. Excluding the Olympics, sales rose 5.2%. 

Earnings exceeded an average estimate of 60 cents a share despite losing 129,000 pay-TV subscribers. The decline comes amid beefed-up competition from AT&T (T) and the wider impact of alternatives such as Netflix (NFLX) and Hulu. Ryvicker, though, downplayed the importance of the drop in video customers.

"We don't worry too much on the slight y/y decline in video subs; a few thousand subs on a 21.6MM base is immaterial to us," she said.

NBCUniversal's sales were skewed by a comparison with the year-ago quarter that included the London Olympics. Excluding the summer games, the unit posted a 3.9% increase in sales. Operating cash flow jumped 22%. Broadcasting was bolstered by NBC's hit show "The Voice," generating 2.6% higher revenue to $1.64 billion.

On the film side, the movie Despicable Me 2 led 3.3% sales growth for the quarter to $1.4 billion, helping to offset a decrease in home entertainment revenue due to lower volume of new releases compared to the same period a year ago. 
  
Cable revenue of $10.49 billion, though 5% higher than the same period a year ago, fell short of analyst expectations for $10.53 billion on lower than expected subscriber and advertising revenue.

Comcast's Parks unit benefitted from new attractions and solid attendance posting operating cash flow of $343 million, 9% above the same period a year ago, beating a consensus estimate of $327 million.

LinkedIn (LNKD), meanwhile, was tumbling Wednesday as the career-focused professional online network handed investors its usual excess -- beating analysts forecasts by a wide margin -- but tempered this time with warnings that growth is decelerating.

Shares were losing 9.8% to $223.03, trimming the stock's gain over the past year to a mere 113%. LinkedIn made clear to investors that revenue can't continue to grow at a pace in the high-double digits. Sales increased 44% in the third quarter, nearly the same as in the second quarter though half as fast as a year ago.

LNKD raised its fourth-quarter guidance but the company's forecast for sales and Ebitda -- earnings before interest, taxes, depreciation and amortization -- was below consensus. Shares currently trade at 35 times the stock's enterprise value as a percentage of its Ebitda, a level that Mark Mahaney, media analyst at RBC Capital Markets indicated that LinkedIn offers "limited upside from current levels."

Dreamworks (DWA), the film studio led by CEO Jeffrey Katzenberg, was surging 18% to $32.75 on the prospect that animated films such as Mr. Peabody & Sherman and Need for Speed, both scheduled for March releases, will reverse the company's fortunes after the disappointing summer performance of Turbo, a story about a hyperactive snail.

--By Leon Lazaroff


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