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Published: Thu, October 27, 2016
Economy | By Melissa Porter

Despite ratings drop, Olympics boosts Comcast in 3Q

Despite ratings drop, Olympics boosts Comcast in 3Q

The company earned profits of $2.2 billion, which was up from $2 billion the same period previous year.

Comcast Corp. had one of its better quarters in some time for its core cable operations business, adding video customers - growing 32,000 in the third quarter.

But the Games lifted ad sales by 92.4% and contributed - with rising retransmission consent fees - to a 77.5% jump in distribution revenues. "Cable delivered solid operating cash flow growth coupled with great customer metrics, and has now added 170,000 video subscribers over the past 12 months", he notes. Distribution revenue increased 27.3 percent driven by the Olympics and contractual rate increases, "partially offset by a decline in subscribers at our cable networks", the company said.

Philadelphia-based Comcast reported business services revenues of $1.40 billion for the third quarter ended September 30, an increase of 15.5 percent from $1.21 billion in the third quarter of 2015. While these cheaper bundles are mostly targeted at the estimated 20 million people who have already dropped cable or never had it, they may take customers from cable companies like Comcast.

Operating income increased by 11 percent to $4.44 billion.

But the Universal Pictures movie studio turned in a lackluster performance: It generated $1.8 billion in revenue, down almost 8 percent from a year earlier.

The Broadcast Television unit's revenues were up 56.6% to $3.09 billion - but would have fallen 3.6% to $1.90 billion without $1.2 billion from the Olympics.

The company's broadband and business services divisions also contributed to the overall revenues in the third quarter.

The Universal film studio's revenue fell 6.1 percent to US$353 million due to the lukewarm response to third-quarter releases, including "Jason Bourne" and "The Secret Life of Pets".

Overall, Comcast consolidated revenue also increased 14.2 percent y-o-y to $21,319 million in the current quarter as compared to $18,669 million.

Quarterly film revenue declined 7.9 percent to $1.8 billion when including revenue attributable to DreamWorks Animation from its acquisition date of August 22. Internet revenue increased 8.8 percent, which Comcast says reflects an increase in the number of residential high-speed customers, rate adjustments and an increase in the number of customers receiving higher levels of service.

Revenue at Universal theme parks rose 62.4 percent to US$706 million, boosted by Harry Potter attractions and the addition of Universal Studios Japan.

For the Rio Olympics, Comcast integrated online streams and TV video feeds - what it said was more than 6,000 hours of programming - into its X1 cable box.

Pay-TV operators have been competing against streaming video services, such as Netflix Inc, which have been luring customers away from cable and satellite TV with lower-priced offerings. Q3-16 revenue includes $1.6 billion of revenue generated by the broadcast of the 2016 Rio Olympics, of which $1.2 billion was related to advertising revenue says Comcast.

Comcast's MVNO deal with Verizon, combined with its bases of 15 million Wi-Fi hot spots and more than 28 million customers, are enough to build a profitable wireless business. It gained 330,000 internet customers, compared with 320,000 a year ago.

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