TWC Time Warner Cable

By Shalini Ramachandran 

Comcast Corp. reported better-than-expected financial results and added video customers again in the first quarter, extending a strong streak for the cable industry in a weak overall pay-TV market.

The company added 53,000 video customers, compared with a loss of 8,000 in the prior-year quarter. Its quarterly profit rose to $2.13 billion, or 87 cents a share, up from $2.06 billion, or 81 cents a share, a year ago.

Excluding certain gains and costs, adjusted profit per share for the latest quarter was 84 cents. Revenue grew 5.3% to $18.79 billion. Both figures exceeded estimates from analysts, who were projecting adjusted earnings of 79 cents a share on $18.6 billion in revenue, according to Thomson Reuters.

Since its Time Warner Cable Inc. deal fell apart last year amid regulatory opposition, Comcast has been on the lookout for new deals, investing in digital media companies and theme parks. The company is in talks to buy DreamWorks Animation SKG Inc. for more than $3 billion, The Wall Street Journal reported late Tuesday.

Class A shares of Comcast, up 13% over the past three months, rose 2% to $62.30 in premarket trading. DreamWorks Animation shares jumped 20% to $32.50.

Comcast's results add to the cable industry's comeback after years of losing video subscribers to satellite and phone companies. Cable companies are benefiting from pouring more investment into their cable TV products and bundling that alongside fast broadband, as well as offering cheaper, slimmed-down bundles of programming for more cost-conscious consumers.

Wall Street analysts say Comcast, in particular, is beginning to benefit from the aggressive rollout of its next-generation X1 Internet-connected set-top box and guide, which the company has said increases customers' time spent watching TV and makes them more likely to stick with Comcast. The company said 35% of its customers now have X1 boxes.

Comcast has also said that subscriber retention has been helped by its efforts to turn around customer service operations after some poor interactions with sales reps went viral. It has budgeted hundreds of millions of dollars toward hiring more technicians, increasing the number of its call centers and supporting an Uber-like app to allow customers to track and rate their technicians.

Comcast has been among cable companies in recent quarters to bolster its video customers even as the overall pay TV industry continues to experience "cord-cutting" and "cord-shaving," when people disconnect their subscriptions or opt for cheaper, skinnier packages.

Comcast's broadband and business services divisions posted strong sales growth in the first quarter, lifting overall revenue at the cable business -- which accounts for the bulk of Comcast's top line -- by 6.7% to $12.2 billion.

Broadband revenue increased 7.6% to $3.3 billion, while voice revenue fell 1.1% to $896 million. Video revenue grew 3.9% to $5.5 billion. Business-services revenue jumped 17.5% to $1.3 billion.

The cable giant added 438,000 broadband customers in the quarter compared with 407,000 a year earlier. Voice customer additions grew to 102,000, compared with 77,000.

At NBCUniversal, revenue grew 3.9% to $6.9 billion, as its cable networks and theme parks businesses offset revenue declines at filmed entertainment and broadcast TV. Excluding the year-ago boost from the 2015 Super Bowl, NBCU's revenue increased 10.2%. Operating cash flow at NBCU increased 10% to $1.6 billion.

Revenue grew 4% at the unit that includes the company's cable TV networks, and operating cash flow grew 6.4% to $956 million. Revenue at the broadcast-TV segment, which includes the flagship NBC network, declined 7.3%, though excluding the impact of the Super Bowl last year, it would have grown 11.4%.

Coming off a blockbuster year, filmed entertainment saw a drop in revenues and operating cash flow. Revenue at the theme parks segment, however, grew 58% to $1 billion, thanks to the inclusion of Universal Studios Japan, which Comcast bought control of last September.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

(END) Dow Jones Newswires

April 27, 2016 07:56 ET (11:56 GMT)

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