Comcast Tops Analysts’ Q2 Expectations Despite Film Studio Downturn

Comcast’s shares are up about 2% in pre-market trading after it reported Q2 results that, although mixed, were largely upbeat for the sprawling company.

Its NBCUniversal — more specifically Universal’s film studio — was the glaring exception as releases including The Huntsman: Winter’s War paled next to last year’s slate which included Jurassic World, Furious 7, and Pitch Perfect 2.

Overall, Comcast’s net income of $2.03 billion was down 5.1% vs last year’s Q2 on revenues of $19.3 billion, up 2.8%. The top line beat analysts’ expectations for about $19.0 billion. Earnings at 83 cents a share also topped forecasts for 81 cents.

“Our Cable subscriber and financial performance during the quarter was outstanding,” CEO Brian Roberts says. “Despite an expected difficult comparison to last year’s record second quarter film slate, NBCUniversal achieved solid results, driven by strength in our TV businesses and Theme Parks, which benefited from the successful opening of The Wizarding World of Harry Potter in Hollywood.”

Next month’s Olympics, “will showcase the incredible breadth of NBCUniversal together with Comcast Cable and the X1 platform.”

NBCUniversal’s revenues fell 1.8% to $7.1 billion — but would have been down 5.1% without the recent acquisition of a 51% interest of Universal Studios Japan from owners including Goldman Sachs. Similarly, operating cash flow, reported down 0.2% to $1.7 billion, would have fallen 6.4%.

The company’s cable networks held their own, with revenues up 4.7% to $2.6 billion and operating cash flow up 8.3% to $944 million. Rate increases to cable and satellite companies outweighed subscriber losses, lifting their payments to NBCU by 6.9%.

Advertising, however, was merely reported as “stable” with rate increases offsetting ratings declines.

The cable unit cut ad, marketing and promotion expenses which compensated for rising programming and production costs.

The NBC broadcast unit fared better with help from a 59.9% increase in content licensing and a 35% jump in retransmission consent fees. Revenues were up 17.3% to $2.1 billion while operating cash flow soared 70.5% to $394 million.

Ad sales for the operation were up 2.9% as higher rates made up for a drop in ratings.

At Universal, the filmed entertainment operation’s revenues fell 40.4% to $1.35 billion while operating cash flow plummeted 86.7% to $56 million.

Theatrical sales dropped 78.8%. Home entertainment fell 25.1% vs last year which included Fifty Shades Of Grey.

But the theme parks helped to relieve the sting: Their revenues, at $1.14 billion, were up 47% with the addition of the interest in the park in Japan — and would still have increased 10.6% without it. Similarly, operating cash flow, at $469 million, was up 40.5% as reported, and would have improved 5.3% if it was factored out.

The company credits higher per capita spending as well as the addition of the Harry Potter attraction in Hollywood.

Of course the main attraction at Comcast is its cash-generating cable systems. Their revenues improved 5.7% to $12.4 billion with operating cash flow up 5.7% to $5.05 billion.

The company lost about 4,000 video customers — its best Q2 result in about a decade — to end the quarter with 22.4 million.

Comcast more than made up for that by adding 220,000 broadband customers, for a total of nearly 24 million.

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