Strength at the core cable operations may be the main story for Comcast’s earnings in this morning’s Q1 report. They gained 53,000 video subscribers, well ahead of expectations and the best the company has seen in nine years.
But NBCUniversal’s theme parks, now with Universal Studios Japan, also helped in an otherwise so-so quarter for the unit.
Comcast shares are up about 2% in pre market trading.
All in, Comcast’s net income at $2.22 billion increased 3.6% vs the period last year on revenues of $18.78 billion, up 5.3%. The top line beat the $18.64 that the Street expected. Earnings at 87 cents a share, adjusted to 84 cents without one time expenses, also beat forecasts for 79 cents.
“Our performance at Comcast Cable was outstanding,” CEO Brian Roberts says. He adds that he’s “excited about the opportunities ahead for Comcast NBCUniversal.”
To be sure, this morning’s report may become an afterthought if the company says anything later about its acquisition talks with DreamWorks Animation. A deal, for more than $3 billion, “would secure Universal with a well established animation studio, a burgeoning TV business, and two gems in the portfolio: AwesomenessTV and Oriental DreamWorks,” Macquarie Research’s Amy Yong says.
As for the Q1 numbers: NBCU saw revenues at $6.86 billion were down 0.4% — but would have been up 5.4% if you factor out the Super Bowl that NBC aired in 2015. Operating cash flow improved 1.8% to $1.62 billion.
Universal’s filmed entertainment operation was the weakest link with revenues down 4.3% to $1.28 billion and a 43.1% fall in cash flow to $167 million. Theatrical sales were down 36.4% compared to last year which included Fifty Shares of Grey, and home video fell 24.4% in competition with last year’s releases which included Lucy.
Fandango and and consumer products, helped by Minions and Jurassic World merchandise, were both up.
Cable networks revenues at $2.54 billion were up 4.0%, with cash flow up 6.4% to $956 million. Distribution revenues were up 5.9%, although ads were flat which the company attributes to “higher rates, offset by audience ratings declines.”
NBC’s broadcast television unit had revenues of $2.08 billion — down 7.3%, but would have been up 11.4% without $376 million it saw last year from the Super Bowl. Cash flow rose 56.5%. Factoring out the NFL championship, ad sales would have increased 9.6%, with higher rates and an additional NFL game in the quarter offsetting the drop in ratings.
Theme Parks helped to pick up the slack. With the acquisition of the 51% interest in Universal Studios Japan, revenues increased 57.5% to $1.03 billion with cash flow up 53.6% to $375 million. Factoring out the change, revenues would have risen 9.6% with cash flow up 3.3%. Guest attendance was “stable” but visitors spent more. The company also benefited as the Easter holiday took place in the quarter, at the end of March.
Per usual, Comcast’s cable systems eclipsed NBCU generating $12.2 billion in revenue, up 6.7%, with $4.89 billion in cash flow, up 5%. They gained 53,000 video subscribers, a big change from last year then they lost 8,000, bringing the total to 22.4 million. Wall Street thought this year’s increase would only come to 5,600. Broadband subs increased by 438,000 to 23.8 million, and phone customers increased 102,000 to 11. 6 million.
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