Comcast Corp. reported higher revenue and earnings in its third quarter, as cable operations added more video subscribers and the summer Olympics Games powered strong gains at its NBCUniversal broadcast unit.
NBCUniversal's latest performance is likely to be tracked closely given AT&T Inc.'s recent agreement to buy Time Warner for $85.4 billion-a deal modeled largely on Comcast's purchase of NBCUniversal, which married content and distribution.
Comcast Chief Executive Brian Roberts declined to comment on the AT&T deal on a call with analysts on Wednesday, but said that he believes "we have a fabulous company" and NBCUniversal has been a great investment.
Its NBCUniversal unit's revenue jumped 28% over a year earlier to $9.2 billion on business tied to the Rio de Janeiro Olympics broadcasts. Excluding the boost from the event, NBCU's revenue increased 5.7% compared with a year earlier.
Comcast added 32,000 video customers to its cable business, compared with a loss of 48,000 subscribers in the prior-year quarter, lengthening a strong streak for the cable industry in a weak overall pay-TV market.
The Philadelphia-based company's improved results highlight cable's comeback after years of losing video subscribers to satellite and phone companies. Cable-TV companies are benefiting from pouring more investment into their services and bundling those alongside fast broadband internet, and cheaper, slimmed-down bundles of programming for more cost-conscious consumers.
Total quarterly profit rose to $2.2 billion, or 92 cents a share, up from $2 billion, or 80 cents a share, a year ago. Revenue grew 14% to $21.3 billion, though up 5.5% when excluding the contribution from the 2016 summer Olympics.
Revenue and profit slightly exceeded estimates from analysts, who were projecting earnings of 91 cents a share on $21.2 billion in revenue, according to Thomson Reuters.
Comcast may soon have a new media-and-broadband rival. On Tuesday, AT&T said its new DirecTV Now nationwide streaming service will be priced at $35 a month and stream more than 100 channels-an offer that undercuts similar packages from traditional operators like Comcast and new entrants like Sony Corp.'s PlayStation Vue.
NBCUniversal Chief Executive Steve Burke said he doesn't think such online television services are going to be "material" to television growth "in the next year or two." He expects new entrants to sign up a fraction of the 20 million homes that don't subscribe to pay-TV today.
"I think we all have a healthy degree of skepticism that these new [over-the-top] entrants are going to create millions and millions and millions of subscribers any time soon," Mr. Burke said. "Most people find tremendous value?in their cable and satellite subscriptions and are not looking to change."
Comcast, so far, has said it is focused on its own cable footprint and isn't interested in creating a nationwide streaming service. That strategy has paid off for the company, as it has managed to grow video customers despite cord-cutting affecting the broader industry. The cable company has, in part, credited its next-generation X1 internet-connected set-top box and guide, which it says increases customers' stickiness with Comcast. The company said nearly 45% of its customers now have X1 boxes.
The cable giant's broadband and business services divisions posted strong sales growth in the third quarter, lifting overall revenue at the cable business, which accounts for the bulk of Comcast's top line, by 6.9% to $12.6 billion.
It added 330,000 broadband customers in the quarter, compared with 320,000 a year earlier. Voice customer additions slowed to 2,000 from 17,000 a year earlier, as the company focused on adding "double-play" cable TV and internet customers in the quarter.
Revenue grew 22% to $2.9 billion at NBCUniversal's cable networks, though excluding the Olympics it would have grown 4.1%. Revenue at the broadcast-TV segment, which includes the flagship NBC network, grew 56.6% to $3 billion. Excluding the impact of the Olympics, it would have declined 3.6%, largely because of a content-licensing deal in the year-ago quarter.
It cable networks' advertising revenue shot up almost 16% in the third quarter. But, excluding the Olympics, advertising growth was flat because higher ad rates were offset by viewership declines.
Comcast shares fell 3% to $62.55 in Wednesday trading in New York.
A major point of debate in the media industry of late has been falling ratings for National Football League games. On the call, Mr. Burke said between 1% and 2% of people are watching NFL and Olympics programming online, which doesn't explain the viewership falloffs.
"It's very difficult to tell precisely what is happening on any sporting property?but if you step back, the Olympics and the NFL are the two highest-rated programs of the year in all of television," Mr. Burke said. He added that both continue to be "very profitable relationships" for Comcast.
Write to Shalini Ramachandran at email@example.com