Comcast Corp. (CMCSA:US), the largest U.S. cable provider, rose the most in more than three years after reporting profit that topped estimates amid subscriber gains and NBCUniversal advertising sales.
The shares rose 5.5 percent to $45.08 at the close in New York, the biggest one-day gain since April 2010. The shares have gained 21 percent for the year.
Comcast gained 187,000 broadband subscribers and lost 159,000 TV customers in a seasonally weak quarter for cable operators as college students disconnect service for the summer vacation. The performance in the categories marked Comcast’s best second-quarter results (CMCSA:US) since 2008.
“Cable subscriber metrics exceeded our estimates in all three services,” Bryan Kraft, an analyst at Evercore Partners Inc. (EVR:US) in New York, said in a note to clients. He has the equivalent of a buy rating on the shares.
Net income in the three months through June climbed 29 percent to $1.73 billion, or 65 cents a share, from $1.35 billion, or 50 cents, a year earlier, the company said today in a statement. The average analyst estimate (CMCSA:US) was for net income of $1.69 billion, or 63 cents a share, according to data compiled by Bloomberg.
This was the seventh (CMCSA:US) consecutive quarter Comcast beat the average net income estimate from analysts compiled by Bloomberg and the biggest earnings day share gain since May 2008, according to data compiled by Bloomberg.
Sales rose 7 percent to $16.3 billion, surpassing the average analyst estimate of $16 billion. NBCUniversal revenue rose 8.9 percent to $6 billion, and the division’s operating cash flow jumped 21 percent to $1.19 billion. NBCUniversal comprises the NBC broadcast network, cable networks including CNBC, USA and Bravo, Universal Pictures and theme parks.
The broadcast network’s advertising revenue gained 13 percent to $1.27 billion, helped by the popularity of “The Voice” reality show. NBC had a “good year” in terms of ratings, Steve Burke, NBCUniversal chief executive officer, said during a conference call today.
“We made up relative performance versus our other competitors,” Brian Roberts, Comcast’s CEO, said during the call. NBC competes for ad dollars with Walt Disney Co.’s ABC, CBS Corp. (CBS:US)’s CBS and 21st Century Fox Inc.’s Fox among broadcast networks.
NBC reached $2.1 billion in advertising commitments for the coming TV season starting in September, according to a person with knowledge of the contracts.
“The bull case for Comcast is the upside of NBCUniversal,” Jaison Blair, an analyst at Telsey Advisory Group in New York, said in an interview. “If Comcast can improve the broadcast programming, the syndication revenues begin to come.”
Revenue from NBC’s cable networks grew 7.7 percent to $2.41 billion and broadcast television sales jumped 12 percent to $1.73 billion. Comcast acquired the remainder of NBCUniversal from General Electric Co. (GE:US) for $16.7 billion in March.
The Universal Pictures studio’s sales improved 13 percent to $1.39 billion. Theme park sales rose 1.3 percent to $546 million.
The Philadelphia-based company also added 161,000 telephone customers as it continues to market its triple-play offering of TV, phone and Internet.
The company said today it repurchased $500 million of its stock in the last quarter. Comcast may examine international acquisition opportunities, without taking on a lot of debt, Chief Financial Officer Michael Angelakis said during the conference call. Comcast is content with the size of its cable operations in the U.S., he said.
“We have about $4.5 billion of our roughly $65 billion revenue base in international, so we’re a bit underweight,” Angelakis said, in reference to sales outside the U.S. from NBC’s entertainment businesses. “We really want to spend time internationally.”
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