Comcast Corp. reported an 8 percent drop in third-quarter earnings Wednesday, a decline caused by expenses related to its pending acquisition of NBC Universal and other one-time costs.
But the country’s biggest cable provider’s revenue climbed at its fastest pace in more than a year on the strength of pricier TV services and cable advertising.
The results topped Wall Street forecasts, but its shares fell 24 cents, or 1.2 percent, to $19.40 in pre-market trading.
Comcast faces two sets of obstacles. First, a slow economy means fewer people are moving to new homes and adding new cable hookups.
Second, it is competing with an array of satellite and phone companies in a market that is basically mature. Most households in the U.S. already have some kind of subscription TV service, so the search for new customers comes down to who can offer a package enticing enough to get people to switch.
Comcast added fewer subscribers in the third quarter than it did in the same three months of 2009. The company fueled growth instead by getting more money from each of them.
Its average revenue per customer climbed more than 10 percent to $129.75 as subscribers took advantage of high-definition video and DVR service. Revenue from each of its products – cable, high-speed Internet and voice – all grew from a year ago.
Overall, revenue climbed 7 percent to $9.49 billion from $8.85 billion in the year-ago quarter. The average forecast from analysts called for revenue of $9.36 billion, according to Thomson Reuters.
Net income fell to $867 million, or 31 cents per share, in the three months ended Sept. 30 from $944 million, or 33 cents per share, a year ago.
Stripping out unusual items, the company said earnings would have risen to 32 cents per share from 28 cents a share a year ago. Analysts surveyed by Thomson Reuters expected earnings of 30 cents a share, on average.
Costs from the NBC Universal deal and a debt refinancing cut earnings by $66 million, or a penny per share. Comcast is hoping to get the federal government to OK its acquisition of a controlling stake in the broadcaster from General Electric Co. by the end of the year.
The company’s loss of basic cable subscribers accelerated in the quarter, amounting to a net loss of 275,000 compared with 132,000 a year ago.
It added 249,000 high-speed Internet customers, 228,000 voice customers and 219,000 digital cable customers. That’s down from net additions in the same quarter a year ago of 361,000, 375,000 and 463,000 respectively.
Overall, Comcast ended the quarter with a total of 48 million subscribers, an increase of 1.2 million, or 2.5 percent. That compares with growth of 3.4 percent in the same quarter a year ago.
Revenue from local ads shown on its cable channels continued to rebound off of steep declines last year, growing 27 percent.