Comcast looks to keep up positive trends in broadband, video as Q3 results are due

Analysts will be watching to see if Comcast Corp. can step up solid growth trends in broadband and video services even as the noise gets louder around cord-cutting and a la carte, while keeping the momentum at the NBCUniversal cable networks, when it reports third-quarter results Wednesday morning.

One news item that will surely draw questions during the earnings call at 8:30 Eastern time is  the company’s unprecedented move to offer HBO to broadband customers who aren’t video subscribers. Under that trial, announced Friday,high-speed Internet  users would pay $40 or $50 a month to get local broadcast channels, HBO GO and video-on-demand through Comcast’s Xfinity Streampix service.

Comcast and other cable operators know that would-be cord cutters will still need a fast, reliable broadband connection, and will often go through a traditional cable provider to get that service. If they can induce such consumers to bundle that broadband subscription with something else, so much the better — and this HBO Go offering may prove an effective lure.

Comcast is expected to post a 23% profit decline in the absence of $862 million in gains on equity sales in the prior-year period, as revenue dips slightly.

According to a poll of analysts taken by Thomson Reuters, Comcast is seen reporting net income of 61 cents a share on revenue of $16.25 billion. In the third quarter of 2012, the company’s profit was 78 cents a share on revenue of $16.54 billion. Excluding the special items, Comcast would have earned 46 cents a share in the year-ago period.

In the second quarter, cable revenue increased 6% to $10.5 billion, driven by increased subscriptions to the company’s in high-Speed Internet and business services offerings, along with higher video and voice revenue. Total revenue per video customer rose 7.4% to $160 per month. Some 77% of Comcast’s video customers took at least two of the company’s main offerings, while 42% subscribed to the bundle of video, phone and broadband service.

During the last earnings call in July, Comcast Cable Chief Executive Neil Smit said the company has been effective — without making a particularly big marketing push — at promoting the benefits of its Xfinity X1 platform, which allows a seamless connection between smartphones and smart TVs. Users can search for, record, watch and comment via social media on their favorite programs using their cell phones or the TV screen.

At NBC Universal, the cable channels should once again carry the freight, led by USA Network, Bravo and Syfy. Cable network revenue rose nearly 8% on higher ad sales and decreased expenses. NBC, which escaped last place in the 18-49 category in the 2012-13 season after several years, has started well for the second year in a row. Through the first four weeks of the current season, it has placed first in the demo, led by “Sunday Night Football” and its Monday lineup including “The Voice” and the new James Spader drama “Blacklist.” Thursday night is still a weak spot, and the much-touted remake of “Ironside,” seen on Wednesday nights at 10, was canceled after only three episodes.

— David B. Wilkerson


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