Comcast CEO Roberts calls recent TV travails a 'competitive patch' and no reason to panic

Comcast Corp. CEO Brian Roberts pushed back against fears of TV subscriber losses and negative views of the company in an investor conference Tuesday, saying, "We came here to say things are great and they are."

The nation's largest cable company has had a few bad weeks with its TV business, worsened by two hurricanes that battered its markets in Texas and Florida. But those are not reasons to lose faith in Comcast's strategic vision in pay-TV, entertainment, news, films, and theme parks, Roberts told the Goldman Sachs Communacopia gathering in New York.

"We thought we should be transparent as to where we were at," he said, referring to Comcast executive Matthew Strauss' disclosure Thursday in a separate investor conference that the company could shed 100,000 to 150,000 cable television subscribers instead of adding 9,000 in the current quarter.

Roberts added that just because of a "90-day period, you should not change your strategy jerky-jerky."

Comcast stock fell about 8 percent and lost about $16 billion in value on Wall Street in the three subsequent trading days. Analysts viewed the subscriber drain as potential evidence that telephone and online competitors were taking painful and lasting bites from Comcast's cable-TV business.

Comcast stock rose significantly in early trading Tuesday morning after telecom analyst Craig Moffett, of MoffettNathanson LLC, upgraded it to buy. "Comcast is now too cheap," he said. But Comcast shares closed flat, climbing 7 cents to $37.90. The company's market capitalization Tuesday, the value of its outstanding shares, was $178.35 billion.

Speaking in the morning, Roberts said that the company was going through a "competitive patch," but that it also had a history of winning during these competitive cycles. The chief executive stressed that while the TV business was important to Comcast and "it's in my blood," the company wants to be in the "profitable part of the video spectrum" and Comcast's most important asset is its network, or platform. This has allowed the company to add one million high-speed internet customers a year for more than a decade, while creating a multibillion-dollar business services unit, and a smartphone offering as part of its bundle of services.

Change in Comcast TV Subscriptions

A Comcast executive said the company is projected to lose between 100,000 and 150,000 TV subscriptions this quarter.

Change in subscribers from the previous quarter,  in thousands

SOURCE: Comcast

Staff Graphic

NBCUniversal, which Comcast acquired in 2011, continues to generate profits with the NBC broadcast-TV network, cable networks and theme parks, Roberts said. "We are trying to be balanced," he said. "We are proud of that balance. We can adjust as we go."

But analysts are highly sensitive to the threat to Comcast from internet streamers such as Google-owned YouTube TV, Netflix, and Amazon Prime that are popular with millennials. And these new video entrants are investing billions of dollars into original content, according to published reports. In addition, Comcast competes with AT&T Inc. and Verizon Communications Inc., which are discounting their TV and internet services to maintain market shares.

Against this backdrop, Comcast executive Strauss spoke last week of the deep TV losses now forecast for the third quarter. "But what you'll also see is us hit our financial numbers because we're very disciplined and we're really looking at household economics," Strauss said at the conference.

Comcast's stock trouble spilled over into Charter Communications, the nation's No. 2 cable-TV company. It has lost about $5.5 billion in market capitalization since Strauss' presentation Thursday, though Charter has not projected similar subscriber losses in the current quarter. The stocks in other legacy media and entertainment companies, among them CBS and Walt Disney Co., took hits, too.

"We expect an especially weak quarter for video, and although partially storm-related, we believe changing behaviors will continue to weigh on overall video subscriber trends," Jefferies Group analyst Mike McCormack wrote in a research report Monday. "The key drivers of historic seasonality [in the third quarter] were snowbirds, and college reconnects. We doubt many college kids are making that call anymore."