Comcast profit drops on film sales, beats Wall Street estimates

Comcast Corp (CMCSA.O) reported a 5 percent drop in quarterly profit on Wednesday, hurt by lower film division sales, but managed to beat Wall Street expectations due to growth in its business services and high-speed internet units. Shares of the largest U.S. cable operator and high-speed internet provider were up 2.7 percent at $69 in premarket trading.

Second-quarter revenue rose 2.8 percent to $19.27 billion from a year earlier and slightly exceeded the analysts’ average estimate of $18.99 billion, according to Thomson Reuters I/B/E/S.

Net income fell to $2.03 billion, or 83 cents per share, from $2.14 billion, or 84 cents per share. Analysts were expecting 81 cents a share. Philadelphia-based Comcast lost 4,000 pay-TV subscribers in the quarter, but that was less than the year-earlier loss of 69,000.

To keep cable customers from switching to lower-priced video streaming services such as Hulu, Comcast has been investing to improve customer service and enhance the capabilities of its set-top boxes and TV interface. It said in early July that it would let customers stream Netflix Inc’s (NFLX.O) online content through its X1 cable-TV service in coming months.

Revenue rose 6 percent to $12.44 billion for the cable unit and jumped 17 percent to $1.36 billion for business services.

Internet revenue increased 8.6 percent to $3.37 billion as customer additions rose 22.3 percent to 220,000.

Revenue in the NBCUniversal division, which includes news cable networks NBC and Telemundo, film studios and theme parks, fell 1.8 percent to $7.1 billion.

NBCUniversal is expected to see gains in ad sales in the second half of 2016 from the Rio Olympic Games, which start Aug. 5.

Revenue from the Universal film studio slid 40 percent to $1.35 billion due to weak sales from releases including “The Huntsman: Winter’s War” and “Warcraft.” A year earlier, the studio delivered summer blockbusters “Furious 7” and “Jurassic World.”

Universal theme parks generated a 47 percent revenue increase to $1.14 billion, boosted by attractions such as “The Wizarding World of Harry Potter” at its Orlando, Florida and Los Angeles sites. The unit also benefited from the addition of Universal Studios Japan, which Comcast bought a majority stake in for $1.5 billion last year.

(Reporting by Malathi Nayak; Editing by Bill Rigby and Lisa Von Ahn)

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