NEW YORK (Reuters) - Comcast Corp’s quarterly profit topped estimates on strong growth in cable and internet subscribers and hits such as “Fifty Shades Darker” and “Get Out” boosted movie revenue, the No. 1 U.S. cable operator said on Thursday.
Shares rose as much as 4 percent to a record high in early trading and were last at $39.91, up 3 percent from Wednesday’s close.
Comcast’s cable television business is under pressure as younger viewers shun cable bundles in favor of cheaper streaming options such as Netflix Inc.
The company has been investing in customer service and is offering the X1 set-top platform for a variety of content. Last year, Comcast made Netflix available through X1 and announced a similar deal with Alphabet Inc’s YouTube in February.
Revenue in Comcast’s cable business rose 5.8 percent as the company added 42,000 video subscribers and 429,000 broadband subscribers in the quarter, which industry analysts considered to be strong growth.
The company also plans to offer a wireless service later this year in hope of increasing customer loyalty. The service, called Xfinity Mobile, will launch on Verizon Communications Inc’s airwaves as part of a 2011 agreement between the companies.
“We believe wireless represents the next massive opportunity for cable and this has yet to be embraced by investors,” wrote Jonathan Chaplin, an analyst at New Street Research.
Industry analysts have speculated that Comcast’s entry into the wireless market could mean it wants to buy a U.S. wireless carrier such as T-Mobile US Inc or Verizon.
Verizon Chief Executive Officer Lowell McAdam said in an interview with Bloomberg last week that he is open to deal talks with companies ranging from Comcast to Walt Disney Co.
“We are very content with the company we’ve got,” Comcast CEO Brian Roberts told CNBC on Thursday when asked about McAdam’s comments.
Sales in its NBCUniversal unit were up 14.7 percent, helped by a 43.2 percent increase in filmed entertainment revenue.
Net income attributable to the company rose 20.2 percent to $2.57 billion, or 53 cents a share, in the first quarter.
Revenue jumped 8.9 percent to $20.46 billion.
Analysts expected earnings of 44 cents per share on revenue of $20.12 billion, according to Thomson Reuters I/B/E/S.
Additional reporting by Anna Driver in New York; Editing by Jeffrey Benkoe and Nick Zieminski