(Reuters) - Comcast Corp on Thursday beat Wall Street’s revenue and profit estimates due to growth in broadband customers, but the company lost more cable TV subscribers than Wall Street expected and its NBC Universal unit revenues were hurt as the film “Cats” bombed at the box office.
Management said on the earnings call that it expected accelerating cable TV subscriber declines, which helped push the stock down 1.3%. Other media company shares were also down.
“With the rate adjustments that we are implementing in 2020 as well as the ongoing changes in consumer behavior, we expect higher video subscriber losses this year,” said Chief Financial Officer Michael Cavanagh.
Pay TV companies have been raising rates instead of trying to hang on to bargain-chasers who are cutting cable service. In the fourth quarter Comcast lost 149,000 video customers, more than a loss of 139,000 estimated by research firm FactSet, but fewer than the 238,000 video customers it lost in the third quarter.
The company has been vocal about its effort to chase broadband customers to offset cord-cutting, as viewers who stream TV and film require a broadband connection to do so.
It gained 442,000 broadband subscribers in the quarter, beating analysts’ average estimate of 378,000 net additions, according to FactSet. Revenue from that business grew 8.8% to $4.79 billion.
Comcast will enter the streaming video war on April 15, when it launches its advertising-supported Peacock streaming service to Comcast customers, followed by a launch across the United States on July 15.
The company reported fourth-quarter revenue of $28.4 billion, beating the Wall Street consensus estimate of $28.17 billion, according to IBES data from Refinitiv.
Revenue growth was aided by British pay-TV group Sky, which the company acquired for $39 billion in 2018. The business generated fourth-quarter revenue of $5.04 billion, beating the average estimate of $4.82 billion.
For the fourth quarter Comcast’s NBCUniversal segment, which includes NBC Entertainment and Universal Pictures, reported revenue of $9.15 billion, down 2.6% from a year earlier. Revenue at the filmed entertainment unit fell 21% from the same quarter a year earlier.
Net income attributable to Comcast rose to $3.16 billion, or 68 cents per share, from $2.51 billion, or 55 cents per share, a year earlier.
Excluding items, the company earned 79 cents per share. Analysts on average had estimated the company to earn 76 cents.
Comcast increased its dividend by 10% to $0.92 per share on an annualized basis for 2020.
Reporting by Helen Coster in New York and Neha Malara in Bengaluru; Additional reporting by Munsif Vengattil in Bengaluru; Editing by Matthew Lewis and David Gregorio