Comcast Corp. reported strong third-quarter earnings, holding onto more cable customers than expected despite the sluggish U.S. economy. However, the media conglomerate's two NBCUniversal units turned in frowny-face results.
The NBC broadcast network and the Los Angeles based Universal movie studio posted weak numbers for the quarter ended Sept. 30. The film studio underperformed at the box office, resulting in a 7.8% revenue decline compared with the third quarter of 2010.
Tepid ratings at NBC as well as increased spending for new prime-time programming added to the drag on NBCUniversal's overall results. The broadcast TV division barely turned a profit.
As usual, NBCUniversal's collection of profitable cable television networks, including USA, Bravo, Syfy and E!, did their best to make up for lackluster numbers in the broadcast and film units.
"The core of the programming business in NBCUniversal's cable networks unit and the results were good," Craig Moffett, senior analyst for Bernstein Research, wrote Wednesday morning just after Comcast released its earnings. "But the face of NBCU is the broadcast network, and while investors were braced for a weak result, they didn't disappoint in disappointing."
Overall, NBCUniversal generated $5 billion in revenue, a 4.6% increase from the year-earlier period. Cable networks delivered 12% higher revenue of $2.1 billion. The broadcast television division contributed $1.5 billion for the quarter, an increase of 2.9%.
The movie studio generated $1.1 billion in revenue compared with $1.2 billion in the 2010 period. Revenue for theme parks, including Universal Studios in Los Angeles, swelled 9.1% to $580 million.
Comcast acquired 51% of NBCUniversal in January and longtime owner General Electric holds the remaining 49%.
The bulk of business for Philadelphia-based Comcast is the delivery of cable television and high-speed Internet service to homes and businesses. Analysts were pleased at Comcast's cable subscriber losses -- 165,000 homes -- which was significantly better than the staggering loss of 275,000 in the third quarter of 2010.
Revenue to the company's cable communications unit, which includes the video and high-speed Internet customers, increased 5% to $9.3 billion.
As a whole, Comcast -- the nation's largest cable television provider -- generated $14.3 billion in revenue, an increase of 51% over the year-earlier period. Net income attributable to Comcast was $908 million, or 33 cents a share, up from $867 million, or 31 cents a share, in the third quarter of 2010.
Analysts had been expecting earnings of 40 cents a share, according to Thomson Reuters. Comcast executives said investments in the quarter contributed to the lower-than-expected earnings.
"Comcast's core cable business may not be "on fire" ... but their cable metrics are all significantly stronger than peers," Moffett wrote in his research report.
-- Meg James
Photo: Comcast headquarters in Philadelphia. Credit: Roberto Gonzalez / The Orlando Sentinel.