Cable TV

Q2-2015: Comcast reports 11% revenue growth, loses 69,000 video customers

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BENGALURU: Comcast Corporation (Comcast) reported 11.3 per cent growth in consolidated revenue in Q2-2015 (quarter ended 30 June, 2015) to $18,743 million as compared to the $16,844 million in the corresponding year ago quarter. 

In Q1-2015, the company had reported consolidated revenue of $17,853 million. The company’s Cable Communications and NBCUniversal segments reported a y-o-y increase in revenue.

Comcast consolidated operating income increased 7.9 per cent in Q2-2015 to $4105 million as compared to the $3804 million in Q2-2014 and was 5.5 per cent more than the $3890 million Q1-2015. Year to date (YTD, 6M-2015), the company’s consolidated revenue grew 6.8 per cent to $36,596 million from $34,252 in the corresponding year ago period. 

Though the company’s Cable Communication segment reported a fall of 69,000 video customers in Q2-2015, video revenue grew 3.7 per cent in Q2-2015 to $5431 million from $5239 million during the corresponding year ago quarter. YTD, video revenue increased 3.3 per cent to $10,762 million as compared to $10,417 million in 6M-2014.

Comcast Chairman and CEO Brian L Roberts said, "Our second quarter results, including 11.3 per cent revenue growth and eight per cent operating cash flow growth, demonstrate the strength and momentum we are seeing across our businesses. In Cable, high-speed Internet and business services continued to perform extremely well, and, significantly, this was the best second quarter video customer results we've had in nine years. Our focus on accelerating the deployment of our transformative X1 platform, as well as efforts to improve customer service, are clearly making a difference, with lower churn across all product categories. NBCUniversal had an exceptional quarter, led by the record-breaking box office performances of Jurassic World and Furious 7 and continued strong momentum in our theme parks. In addition, NBC won the 2014-2015 broadcast season for adults 18-49. Our teams are executing incredibly well across our strong and diversified portfolio, and I am excited for what we can deliver in the rest of 2015 and beyond."

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

Let us look at the numbers reported by Comcast

Cable Communications

Comcast’s Cable Communications segment has three products – video, high speed internet and voice.  Five streams add to the segment’s revenue – video, high speed internet, voice, business service and advertising.

This segment’s revenue in Q2-2015 grew 6.3 per cent to $11,729 million as compared to the $11,029 million in Q1-2014. YTD also, the segment’s revenue increased 6.3 per cent to $23,159 million as compared to $21,786 million in 6M-2014. 

Cable Communications customer relationships increased to 272.65 lakh in Q2-2015 as compared to 267.75 lakh in Q2-2014.

Single product customer relationships declined in Q2-2015 to 83.43 lakh from 85.10 lakh in Q1-2014; double product customer relationships in Q2-2015 to 89.36 lakh from 85,74,000 in Q2-2014; triple product customer relationships increased in Q2-2015 to 99.87 lakh from 96.91 lakh in the corresponding year ago quarter.

Operating Cash Flow for Cable Communications increased 5.1 per cent to $4798 million Q2-2015 compared to $4564 million in Q2-2014, reflecting higher revenue, partially offset by a 7.2 per cent increase in operating expenses primarily related to higher video programming costs, as well as an increase in technical and product support expenses driven by an acceleration in the deployment of X1 and investments to improve the customer experience. As a result, this quarter's operating cash flow margin was 40.9 per cent compared to 41.4 per cent in the prior year period.

For the six months ended 30 June, 2015, Cable operating cash flow increased 5.7 per cent to $9472 million compared to $8964 million in 6M-2014. YTD operating cash flow margin was 40.9 per cent compared to 41.1 per cent in 2014.

Video 

Video revenue has been mentioned above. The company lost 69,000 video customers in Q2-2015, much lower than the 144,000 customers it lost in Q1-2014. Total video customer relationships in Q2-2015 stood at 223.06 lakh as compared to the 224.57 lakh in the corresponding year ago quarter.

High speed Internet

High speed internet revenue in Q2-2015 grew 10 per cent to $3101 million from $2819 million in Q2-2014. YTD, revenue from this stream grew 10.3 per cent to $6145 million from $5569 million in 6M-2014.

High speed internet customer relationships in Q2-2015 improved by 180,000 as compared to the improvement of 203,000 in Q2-2014. The total number of high speed internet customer relationships in Q2-2015 stood at 225.48 lakh, in Q2-2015, the corresponding number was 212.71 lakh.

Voice

Voice revenue in the current quarter at $903 million declined 2.1 per cent as compared to the $921 million in Q2-2014. YTD, revenue from this stream declined 1.8 per cent to $1809 million as compared to the $1842 million in 6M-2014.

Voice customer relationships increased to 113.19 lakh as compared to the 110.03 lakh in Q2-2014.

Business services, Advertising and Other

Business services revenue grew 20.4 per cent to $1161 million in Q2-2015 as compared to $961 million in Q2-2015. Business services revenue in 6M-2015 increased 20.9 per cent to $2275 million as compared to the $1883 million in 6M-2014.

Advertising revenue in Q2-2015 declined by 0.9 per cent to $582 million from $589 million in Q2-2014, while for 6M-2015, revenue declined 0.8 per cent to $1086 million as compared to $1094 million in 6M-2014.

‘Other’ revenue in Q1-2015 increased 10.9 per cent to $551 million as compared to the $497 in the corresponding year ago quarter. YTD, ‘Other’ revenue increased 10.2 per cent to $1082 million as compared to the $982 million in 6M-2014.

NBCUniversal 

Cable Networks, Broadcast television, Filmed Entertainment and Themed Parks contribute to NBCUniversal segment’s revenues.

NBCUniversal revenue in Q2-2015 at $7230 million increased 20.2 per cent as compared to the $6016 million in the corresponding year ago quarter. For 6M-2015, revenue from this segment increased 7.3 per cent to $13,834 million from $12,892 million in the corresponding year ago six month period.

Operating cash flow increased 19.4 per cent to $1712 million in Q2-2015 as compared to the $1434 million in Q2-2014. During 6M-2015, operating cash flow from this segment improved 16.8 per cent to $3206 million as compared to the $2745 million in 6M-2014 driven by strong results at Filmed Entertainment and Theme Parks.

Cable Networks

Cable Networks revenue in Q-2015 declined 4.6 per cent to $872 million as compared to the $914 million in Q2-2014, reflecting a 26.3 per cent decrease in content licensing and other revenue due to the timing of content provided under licensing agreements and a three per cent decline in advertising revenue, partially offset by a 5.6 per cent increase in distribution revenue. Operating cash flow decreased 4.6 per cent to $872 million compared to $914 million in Q2-2014, reflecting lower revenue and modest increases in other operating and administrative expenses.

For 6M-2015, revenue 2.2 per cent to $1170 million as compared to the $1809 million in 6M-2014. Operating cash flow decreased 2.2 per cent to $1.8 billion in 6M-2015.

Broadcast Television

Broadcast Television revenue increased 3.7 per cent in Q2-2015 to $240 million as compared to the $231 million in Q2-2014 reflecting a slight increase in advertising revenue and higher retransmission consent fees, which were offset by lower content licensing revenue. Operating cash flow decreased 3.7 per cent to $231 million compared to Q2-2014, primarily reflecting increases in other operating and administrative expenses, which were largely offset by a decrease in programming and production costs associated with the timing of the airing of certain shows in our primetime schedule.

YTD, Broadcast Television revenue increased 14 per cent to $413 million as compared to $352 million in 6M-2014. Excluding $376 million of revenue generated by the NFL's Super Bowl in the Q1-2015, as well as $846 million of revenue generated by the Sochi Olympics in Q1-2014, revenue increased 2.6 per cent. Operating cash flow increased 14 per cent to $413 million compared to $362 million in 6M-2014.

Filmed Entertainment

Filmed Entertainment revenue in Q2-2015 more than doubled (up 2.17 times) to $422 million as compared to the $195 million in Q2-2014 driven by higher theatrical revenue from the record performances of Furious 7 and Jurassic World. Operating cash flow increased $227 million to $422 million, reflecting higher revenue, partially offset by an increase in the amortization of film costs and higher advertising, marketing and promotion expense due to a larger film slate.

For 6M-2015, revenue increased 48.1 per cent to $715 million as compared to $483 million in 6M-2014. Operating cash flow increased 48.1 per cent to $715 million compared to $483 million in 6M-2014.

Themed Parks

Themed Parks in Q2-2015 increased 44.9 per cent to $354 million as compared to the $244 million in Q2-2014 reflecting higher guest attendance and per capita spending, driven by the continued success of Orlando's The Wizarding World of Harry Potter - Diagon Alley. Q2-2015 cash flow increased 44.9 per cent to $354 million compared to $244 million in the same period last year, reflecting higher revenue, partially offset by an increase in operating costs to support the new attractions.

For 6M-2015, revenue increased 48.9 per cent to $616 million as compared to the $414 million in 6M-2014. Operating cash flow increased 48.9 per cent to $617 million compared to $414 million in 6M-2014.

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