PHILADELPHIA - Comcast Corp., the nation's largest TV and Internet provider, on Tuesday posted a drop in third-quarter earnings that was milder than expected. Its NBCUniversal media subsidiary overcame the loss of Olympics programming with better movies like "Despicable Me 2" as well as upbeat theme park revenue.
On the pay TV side, 876,000 more consumers than a year ago opted for high-definition and digital video recorder service, which costs $15.95 a month per set-top box in certain regions like its home base of Philadelphia. That, combined with a price hike and customers adding channels, helped video revenue rise, more than making up for the loss of 355,000 video subscribers over the last 12 months.
Comcast ended the quarter with 21.6 million video customers. It added 1.3 million Internet customers compared with a year ago to finish with 20.3 million.
Net income fell 18 per cent to $1.73 billion, or 65 cents per share. A year ago, the company benefited from the sale of wireless spectrum and its stake in pay TV network operator A&E. This year, one-time items cancelled each other out. The 65 cents per share profit beat the 60 cents expected by analysts polled by FactSet.
Revenue dropped 2 per cent to $16.15 billion, short of the $16.25 billion analysts expected. Excluding the $1.19 billion in Olympics ad sales last year, revenue would have grown 5 per cent.
Comcast shares fell 65 cents, or 1.4 per cent, to $47.06 in morning trading. They are still up almost 28 per cent since the start of the year.
Comcast continues to reap the benefits of its takeover of entertainment company NBCUniversal, which it began by taking a 51 per cent stake for $13.5 billion in January 2011. It bought out minority owner GE for another $16.7 billion in March, five years ahead of schedule.
While NBCU revenue fell 14 per cent to $5.85 billion, excluding the Olympics, it would have grown 4 per cent.
Movie profits were helped because of the success of "Despicable Me 2," which has grossed more than $900 million in ticket sales worldwide since coming out in July. The opening of the "Transformers 3-D" ride at the Universal Orlando Resort in Florida this summer boosted attendance and spending.
Revenue from TV, Internet and voice hookups rose 5 per cent to $10.49 billion.
The average revenue for every video customer per month rose 7 per cent to $161.07 a month from $150.73 a year ago.
The company lost video customers in the face of rising competition from telecoms operators AT&T and Verizon, which now compete to serve about 44 per cent of the 53.7 million homes and businesses that are in Comcast's service area.
That's up from 41 per cent a year ago as AT&T continues to expand its footprint.
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