An 8 percent revenue surge at NBCUniversal and 363,000 new U.S. high-speed internet customers powered a strong third quarter at Comcast Corp. as the company pivots to connectivity-based internet services and away from cable television, the Philadelphia communications giant said Thursday.
Comcast also broke its public silence Thursday on Sky, the UK-based pay-television service it acquired for $40 billion this month.
Comcast chief executive Brian Roberts, in response to a question on a Wall Street conference call as to whether he paid too much for Sky, said, "Today we move forward, and we are excited about the road ahead."
Analysts believe that Roberts overpaid for the historic satellite operator as he seeks to find ways to compete with streamers and faces hard times in the U.S. cable television business. But Roberts said that he believed that the London stock market had "mispriced" Sky before the takeover bid between Comcast, Rupert Murdoch-controlled 21st Century Fox, and Walt Disney Co. drove up the price for Sky shares.
Roberts compared the Sky deal to the transformative acquisition of AT&T's broadband business about 15 years ago that made Comcast the largest U.S. cable company and the purchase of NBCUniversal in 2011 that brought NBC broadcast television, NBCU cable networks, and Universal theme parks and movie studio to Comcast.
Sky will enable Comcast to deliver television or internet to 50 million homes in the United States and Europe, Roberts and Sky CEO Jeremy Darroch said.
When it purchased the AT&T broadband business and NBCUniversal, Comcast sacked the top executives of those companies and replaced them with Roberts allies.
Roberts said he would not do the same with Sky's leadership. Darroch, who cashed out his Sky shares to Comcast for $17.2 million, answered questioned about the Sky business for about 20 minutes and confirmed that he planned to stay with the company.
Darroch said Sky intends to "grow in all segments of the pay-TV" business. "We have a product for you," he said of Sky's European customers.
Darroch emphasized Sky's channels — Sky Atlantic, Sky One, Sky Cinema, Sky Sports, and Sky News — and its original shows. Many believe that Comcast could use the Sky brand to launch a global streaming service as it faces competition from Netflix and Amazon Prime. But analysts fear that a content race with Netflix, which is spending billions of dollars to acquire content, would harm Comcast financially.
In its third quarter, Comcast's consolidated revenue from NBCUniversal and cable and internet operations rose 5 percent to $21.1 billion. Profits jumped 9.3 percent to $2.9 billion. Sky's results were not consolidated into Comcast third-quarter revenue and profit report, as the deal just closed. In the future, Comcast expects to report separate financials for its U.S. cable division, NBCUniversal, and Sky.
Comcast added 363,000 Xfinity Internet customers, compared with 214,000 in the year-ago quarter, and lost 106,000 cable-TV subscribers, vs. losing 125,000 in the comparable quarter.
Comcast said it now has one million Xfinity Mobile customers in the smartphone business that it launched in 2017.
NBCUniversal showed solid revenue growth at the broadcast television and cable networks, both up about 10 percent. Bad weather crimped attendance at the Universal theme park in Osaka, Japan, executives said.
Steve Burke, head of NBCUniversal, said that political advertising was strong and "looks more like a presidential year than a midterm election."