Comcast revenues up 4 percent in Q3

Third-quarter revenue at Comcast Corp. rose 4 percent, to $16.8 billion, and net income soared 50 percent, to $2.6 billion, as the company added 315,000 high-speed Internet customers and shed 81,000 TV customers, the cable giant reported Thursday.

When adjusted for a tax gain and $77 million in expenses associated with the proposed acquisition of Time Warner Cable Inc., net income rose 10.6 percent, the company said.

Shares of Comcast, in addition to those of acquisition target Time Warner Cable, jumped in morning trading on a broad surge on Wall Street. At the close, Comcast was up 3.36 percent, to $53.22. Time Warner Cable shares closed up 3.59 percent, to $140.93.

Comcast chief executive Brian Roberts said in the earnings conference call that he did not believe the Federal Communications Commission's decision Wednesday to pause its merger-review "shot clock" was a big deal. The FCC froze the clock so it could take time to settle a narrow dispute of how companies would disclose programming contracts with regulators reviewing the Comcast/Time Warner Cable and AT&T Inc./DirecTV transactions, he said.

Roberts said he still believes the Comcast/Time Warner Cable deal can be approved by early 2015.

With his company facing sharp criticism for its poor customer-service rankings, Roberts told analysts that Comcast needed "to do a better job ensuring excellence," and that "customer service should be our best product."

The comments seemed to be Roberts' strongest on the topic in several years. Both Comcast and Time Warner Cable ranked at the bottom of satisfaction ratings in a national consumer survey this year. In addition, there have been highly publicized customer-service failings in recent months, including a recording posted online of a Comcast call center employee who would not let a subscriber cancel Internet service, and a Northern California man who says he was fired after complaining to Comcast executives about overcharges on his bill. Comcast has apologized in both instances for its customer service.

The company's two divisions, Comcast Cable and NBCUniversal, performed solidly in the third quarter with the exception of cable TV, cable channels, and the Universal movie studio. Cable-TV revenue rose 1 percent to $5.2 billion, and cable-channels revenue climbed less than 1 percent to $2.3 billion. Movie studio revenue fell 15 percent to $1.2 billion. Comcast has said it expects a blockbuster year in 2015.

NBCUniversal cable channels have been hurt by industrywide ratings declines. NBCUniversal chief executive Steve Burke said in Thursday's conference call that cable-channel ratings could be challenged over the next five to 10 years because of TV trends, which include more shows competing for audiences and popular reruns streamed on the Internet.

NBCUniversal will be making changes to the USA cable channel to retain its popularity, including developing edgier original shows, and relocating NBCUniversal-owned sports to the cable channel.

Roberts and Burke noted the recent decisions by CBS Corp. and Time Warner's HBO unit to offer their content over the Internet and directly to consumers, making that content available to viewers outside the tradition cable bundle. Burke said he believed it would be hard for HBO to develop the straight-to-consumer model without hurting its traditional business of selling HBO through pay-TV distributors.

Strong businesses at Comcast in the third quarter included business services, high-speed Internet, NBC broadcast television, and theme parks. Theme-park revenue rose 19 percent in the third quarter to $786 million after the Universal Orlando resort in Florida opened its second Harry Potter attraction. Operating cash flow, a measurement of the business's profitability, climbed 17 percent to $402 million.

Thrilled with the business since it acquired NBCUniversal in 2011, Comcast recently said it would partner with a Chinese consortium to construct and operate a theme park in Beijing.

In its legacy cable-TV business, Comcast said that the 81,000 decline in TV subscribers was its best third quarter in seven years, and that it accomplished the feat despite more competition from AT&T. The gain of 315,000 high-speed Internet customers was the best third quarter in five years.