Comcast posts 14.8 percent quarterly profit jump

Comcast Corp. reported solid second-quarter earnings, with revenue climbing modestly at 3.5 percent to $16.8 billion and profit shooting ahead 14.8 percent to $2 billion. The company lost 144,000 TV subscribers - an improvement over the 162,000 lost a year ago - and added 203,000 high-speed Internet customers.

Brian L. Roberts, the company's chief executive officer and chairman, said that it was the cable division's best second-quarter performance in six years.

Comcast typically loses cable-TV subscribers in the second quarter because of college students' canceling service, and people going on summer vacations to second homes.

The cable-TV and Internet giant operated smoothly despite the distraction of its proposed $45.2 billion acquisition of Time Warner Cable Inc., Roberts said in a conference call with analysts.

Washington lawmakers have held three hearings in recent months on the deal now formally under regulatory review for public-interest benefits and anticompetitive concerns by the Federal Communications Commission and the U.S. Justice Department.

The FCC started its 180-day shot clock this month, and the Justice Department has been meeting with entertainment-industry officials.

Comcast spent $44 million in the second quarter on deal-related costs such as lawyer, banker, and consultant fees, said company vice chairman and chief financial officer Michael Angelakis. Comcast seems likely to spend in total well over $100 million by the time it closes, because of the transaction's complexity. It involves acquiring Time Warner Cable, and then selling TV and Internet subscribers to Charter Communications Inc., swapping cable-TV systems with Charter, and spinning off a separate, publicly traded cable-TV and Internet company.

Comcast agreed to disgorge almost four million cable-TV subscribers to ease regulatory concerns in Washington and keep its national pay-TV market share around 30 percent. The company hoped to complete the Time Warner Cable deal this year, but that seems questionable because of AT&T Inc.'s proposed $48 billion deal for DirecTV that Washington regulators will have to simultaneously review.

Angelakis said Tuesday that he expected Comcast to hold a shareholder vote in the fall on the proposed Time Warner Cable/Charter transaction.

"Our hope is that we get it all done this year," he said.

Comcast's second-quarter performance reinforced the cable division's core economic trends - a transition from cable-TV to high-speed Internet and business services.

The 203,000-subscriber gain in Internet customers was higher than last year's 187,000 new Internet customers in the same period, indicating that Comcast was still taking market share away from slower DSL technology.

Second-quarter revenue related to high-speed Internet grew 9.7 percent to $2.8 billion. Company officials said high-speed Internet revenue was growing because of rate hikes and premium-cost higher-speed tiers. Cable-TV revenue advanced 1.2 percent in the second quarter to $5.2 billion.

Comcast's business-services division, which provides TV, high-speed Internet, and phone service to small and midsize firms, reported a 22.4 percent gain in second-quarter revenue to $965 million.

NBCUniversal, the Comcast-owned news and entertainment conglomerate, reported weak revenue growth, mostly because a year ago its blockbuster film slate included Fast & Furious and Despicable Me franchise releases. But the NBC broadcast TV network finished first in advertiser-coveted audiences in the just-finished season. Roberts and Angelakis said they were pleased with its performance.

Stephen Burke, the head of NBCUniversal, said the entertainment company had a 5 percent gain in up-front ad sales, or advanced sales for the next TV season, while the industry generally saw up-front ad-sale declines.

Referencing the recent announcement that 21st Century Fox had offered to buy Time Warner Inc. for $80 billion, Burke said, "We certainly don't think we need to bulk up on content."