By Lillian Rizzo
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 24, 2020).
Cable giant Comcast Corp.'s net profit rose 26% in the fourth quarter, once again riding on the back of internet subscriber growth amid continued pay-TV customer losses.
The Philadelphia company reported a profit of $3.16 billion for the fourth quarter, or 68 cents a share, meeting FactSet analysts' estimates. This is up from $2.51 billion, or 55 cents a share, in the same period last year.
Revenue rose 2% to $28.4 billion, and Comcast said it would increase its dividend by 10% to 92 cents a share this year. It is the second year in a row the company raised its dividend by 10%, and the 12th consecutive annual increase.
Comcast's stock was trading down 3.2% at $45.91 by late morning on Thursday.
The company added 442,000 high-speed internet customers in the quarter, and lost 149,000 pay-TV customers -- marking the 11th consecutive quarter of pay-TV customer erosion.
Comcast is bracing for higher pay-TV customer losses in 2020, Chief Financial Officer Michael Cavanagh said during Thursday's earnings call.
Company executives have previously said Comcast won't chase cable customers defecting to streaming apps. Instead, Comcast's focus will remain on its broadband business and its investment in its streaming service, Peacock, on which it plans to spend $2 billion over the next two years.
The U.K.-based Sky performed well, more than a year since being acquired by Comcast. Sky reported a 10% revenue increase to more than $5 billion during the quarter.
This summer, Comcast will launch NBC Sky World News, a 24-hour-a-day news channel across cable and satellite providers. The news service, meant to compete globally with the likes of CNN, will also be available on Peacock and other direct-to-consumer apps. The company plans to add 10 more bureaus to its news operations, and hire about 100 more employees.
Comcast's broadband business generated $4.8 billion in revenue, while its traditional pay-TV unit brought in about $5.5 billion.
Revenue at Comcast's NBCUniversal unit fell 2.6% to $9.15 billion, owing in part to the poor performance of its filmed-entertainment division, which was affected by the weak release of "Cats," in comparison to the same period last year when it had stronger releases with "The Grinch" and "Halloween."
Last week, NBCUniversal unveiled its streaming platform as the company embraced the proliferation of people cutting the cord in favor of direct-to-consumer apps such as Netflix Inc. and Walt Disney Co.'s Hulu.
Unlike Netflix, Hulu and many of its other competitors, Peacock is banking on an ad-supported business model that will allow it to offer a limited version of the app free, and an ad-supported version for $4.99 a month. A no-commercials version will be available for $9.99.
Comcast's pay-TV and broadband customers will receive ad-supported Peacock free beginning in April.
By 2024, Comcast expects to have between 30 million and 35 million active Peacock subscribers, resulting in annual revenue of $2.5 billion.
Comcast's Xfinity Mobile, which launched more than two years ago, added another 261,000 customers in the fourth quarter, a 15% increase from the same quarter in 2018. In total, Comcast has more than 2 million mobile customers as it continues to view the business as a way to hold on to existing customers. The unit generated $372 million in revenue.
Comcast had 55.5 million Comcast Cable and Sky subscribers at the end of the fourth quarter.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
January 24, 2020 02:47 ET (07:47 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.