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NBC ‘Ratings Momentum’ Boosts Comcast’s Q3 Earnings

CEO Brian L. Roberts also singles out the opening of ”The Wizarding World of Harry Potter – Diagon Alley“ as a success

It’s good to have the top-rated network.

Comcast reported on Thursday that it bested earnings estimates for the third quarter of 2014, something CEO Brian L. Roberts (pictured above) credited at least in large part to strong ratings at his broadcast network, NBC. The company reported Q3 earnings per share of $0.73, while Wall Street had forecasted that the number would be closer to $0.70 for the quarter.

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That EPS was on reported revenue rounding up to $16.8 billion, which was right in line with — or perhaps a hair under — what analysts projected. In last year’s comparable third quarter, Comcast reported $0.65 earnings per share on roughly $16.2 billion in revenue.

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Here are some financial particulars from the TV side: Revenue from the Broadcast segment increased 7.7 percent to $1.8 billion (compared to $1.6 billion in the third quarter of 2013), which was driven by an increase in advertising revenue thanks to NBC’s strong ratings through the summer. Higher retransmission consent fees and an increase in content licensing revenue also contributed to the boost.

Cable networks revenue segment increased just 0.7 percent to $2.3 billion (versus $2.2 billion in 2013’s Q3), reflecting a 5.1 percent increase in distribution revenue that was mostly offset by a 4.6 percent decline in advertising revenue due to falling cable ratings.

Meanwhile, the Filmed Entertainment segment decreased 15.2 percent to $1.2 billion in revenue ($1.4 billion in 2013’s Q3), something the company attributed to last year’s big boost from “Despicable Me 2.”

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Revenue for Comcast’s Cable Communications group rose 5.2 percent to $11.0 billion in the third quarter ($10.5 billion in 2013’s Q3). Customer growth — increases of 9.6 percent in high-speed internet and 21 percent in business services — as well as rate adjustments and customers choosing higher levels of services led to more money coming in.

Finally, Theme Park revenue jumped 18.7 percent to $786 million ($661 million in 2013’s Q3) thanks to higher guest attendance and per capita spending, which Comcast says was driven by the opening of Orlando’s “The Wizarding World of Harry Potter – Diagon Alley.”

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Roberts, also chairman of Comcast Corporation, said: “I am pleased to report strong revenue, operating cash flow and free cash flow growth for the third quarter of 2014. Cable results highlight the consistent strength of high-speed Internet and business services, and video customer results were the best for a third quarter in seven years. We continue to focus on innovation and providing the best experience for our customers, and we are thrilled with the response to our superior X1 platform, which recently reached five million boxes deployed.”

He added: “At NBCUniversal, we had another outstanding quarter with double-digit operating cash flow growth, driven by ratings momentum at NBC Broadcast and the successful opening of ‘The Wizarding World of Harry Potter - Diagon Alley’ in Orlando.”

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On the subsequent earnings call, Roberts and his team of executives touched on various topics, including HBO and CBS’s recent announcements of standalone streaming services. The Comcast bosses — who have a professional stake in Hulu — commented that it is a fascinating time to be in this fast-changing business of ever-moving ecosystems, but stressed that HBO in particular must be cautious against cannibalizing its own consumers.

Pricing will be key, they said, warning the premium TV giant of the perils of messing around with the very good thing that it has going.

The execs also expressed continued optimism and encouragement on the pending Time Warner Cable merger.