Comcast Corp., the nation’s largest cable-TV company with Europe’s Sky on its balance sheet for the first time, reported modest fourth-quarter TV subscription losses, a big internet customer gain, and $5 billion in Sky revenue.
Global revenue, including Sky, rose 5.2 percent from the same period a year ago to $28.3 billion.
Comcast’s mobile business passed one million data lines in late 2018 with the addition of 227,000 Xfinity Mobile subscribers in the fourth quarter, which ended Dec. 31. The Philadelphia company is looking to launch a global streaming service in 2020 using NBCUniversal content and shows, plus NBCU-produced originals, executives said Wednesday. The service has not been branded yet.
NBCUniversal head Steve Burke said the yet-to-be-named streaming service can quickly grow by being available for free to 54 million U.S. and European subscribers of Comcast and Sky, a satellite-TV operator with a broadband business and content division, which includes Sky News.
Unlike ad-free streaming giant Netflix, the Comcast-owned streaming service will carry advertising. An ad-free version will be available to non-Comcast and non-Sky subscribers for a fee. The fee has not been set. Critics have said that Comcast has been late with a streaming service. Others say Comcast has been prudent, given the economics of the business.
This month, NBCUniversal realigned its top executives to launch the streaming service, putting cable networks boss Bonnie Hammer — who is considered one of the most powerful women in the entertainment industry — in charge of the new streaming service.
Burke said the idea is to better monetize NBCU shows as viewers migrate online to watch entertainment. At the same time, Burke said, “we know there is a huge demand for interactive digital advertising” — which can be sold over a streamed service.
CEO Brian Roberts said on Wednesday that Comcast made a “very successful transition to a connectivity-centric model” in 2018 as compared with the legacy cable-TV-based model and “our team did not miss a beat.”
Consumer revenue in its Xfinity Internet business jumped 10.1 percent to $4.4 billion in the fourth quarter, while Xfinity TV revenue slumped 1.6 percent to $5.6 billion.
Comcast shares rose $1.92 or 5.49 percent to $36.89 as Wall Street cheered the results.
Comcast’s fourth-quarter net income fell sharply compared with the same quarter in 2017, when Comcast had a huge profit boost thanks to the Tax Cuts and Jobs Act, which slashed corporate tax rates from 35 percent to 21 percent. The gain itself came from a projected lower tax rate on deferred taxes. But adjusted for that onetime tax gain, Comcast’s fourth-quarter net income rose 32 percent to $2.9 billion.
Sky’s customer growth flagged in the fourth quarter — 164,000 in 2018 compared with 205,000 in 2017. Company officials attributed the weak gains to outsized Sky customer growth in the third quarter, when Sky added Italian soccer league Serie A to its slate of pay-TV sports programs.
Comcast closed its deal for Sky, with operations in Britain, Germany and other European nations, for $40 billion in October. Comcast now carries $134 billion in current and long-term debt. The company has maintained its credit rating with the debt, though the debt level has worried Wall Street analysts.
Comcast has suspended share buybacks as it seeks to pay down Sky-related debt. But the company also hiked its per-share dividend 10 percent to 84 cents a year on Wednesday.
If Comcast had owned Sky for the entire year, it would have reported $109.5 billion in revenue and $11.8 billion in net income.
In the United States, Comcast lost 29,000 cable-TV customers in the fourth quarter compared with 33,000 TV losses in the same year-ago quarter. The company gained 351,000 high-speed internet customers compared with adding 350,000.
Comcast has boosted Xfinity Internet by at least one million customers for 13 straight years and now calls itself a “broadband company” with a collection of connectivity businesses.