Comcast hurt by rapid rise in cable-cutter defections
Cable television subscribers are leaving Comcast at a faster pace, the company reported Thursday, reflecting the impact of a consumer shift from traditional TV services to online channels and streaming services.
Philadelphia-based Comcast (CMCSA) reported a loss of 125,000 total video customers during the third quarter, up from the 34,000 loss the company logged from for April to June.
Although earnings and revenues beat Wall Street forecasts, Comcast shares were down near- ly 2% at $36.09 in Thursday morning trading.
The stock similarly fell in September after a Comcast executive forecast the expected third-quarter subscriber loss.
Comcast and other traditional pay-television providers have seen cable-cutters depart in favor of popular and less-costly streaming services such as Netflix and online channel bundles they can view over the Internet.
Similarly, ATT on Tuesday reported third-quarter losses of 134,000 pay television customers and a 251,000 decline in satellite subscribers. Both Comcast and ATT attributed some of the declines to the effects of outages and damage from recent hurricanes in Texas and Florida.
Comcast compensated for the subscriber declines with a 5.1% year-over-year jump, to $13.2 billion, in cable communications revenue driven primarily by increases in high-speed Internet, video, and business services.
Business services revenue rose 12.6% over last year’s third quarter, a sign of the increases in customers receiving small- and medium-size business offerings, the company said.
For the quarter, Comcast reported that net income rose 18.5% to $2.65 billion, with earnings per share of 52 cents. The results beat estimates of 49 cents per share and $2.363 billion in net income from financial analysts surveyed by S&P Global Market Intelligence.
Comcast also reported $20.98 billion in revenue, a 1.6% yearover-year-decline. Excluding the boost that the 2016 summer Olympic games in Brazil provided for last year’s third quarter, revenue increased 5.8%, Comcast said.