Reporting its 26th consecutive month of reduced churn, Comcast (NASDAQ: CMCSA) added 53,000 Xfinity TV customers in the first quarter, along with 438,000 high-speed Internet users.
The video numbers exceeded even the bullish expectations from analysts and represented the best performance in that area for the MSO in nine years. Comcast lost 8,000 subscribers in the first quarter of 2015, but it's actually in the black as far as video subs are concerned over the last four quarters.
Comcast didn't specify how many subscriber additions were generated by its new IP-based Xfinity Stream service.
"We've had strong connects, driven by good segmentation of the market," said Neil Smit, CEO of Comcast's cable division. "We've spent a lot of time on the customer experience and I think that's helping churn. X1 is reducing churn. We're doing the right things in customer experience, and we're doing right things on the products side."
Nearly 35 percent of Comcast video customers have the advanced X1 platform, the company noted. These X1 customers continue to be the MSO's most satisfied and engaged — 86 percent of them use Comcast's on-demand platform each month, for example.
As X1 continues to deploy across Comcast's footprint, not only is churn going down, but revenue per customer is going up — it increased 4 percent per cable customer in the first quarter.
Overall video revenue for Comcast improved 3.9 percent in the quarter to $5.9 billion.
The company's broadband growth was its best in four years and it marked an increase compared to customer additions of 407,000 in the first quarter last year.
Comcast added 102,000 voice customers during the three-month period, but saw voice revenue decline 1.1 percent to $896 million.
Business services revenue increased 17.5 percent to $1.3 billion.
Overall cable business revenue increased 7 percent for Comcast in the quarter to $12.2 billion. On the company's humming NBCUniversal side, total revenue was up 3.9 percent to $6.86 billion.
"Comcast continues to execute at a high level, with consolidated revenue, OCF and EPS topping expectations," said Jefferies analyst Mike McCormack in a note to investors. "Video adds (and PSUs) were strong, allaying cord cutting concerns, though Cable margins were weaker than anticipated. NBCU continues to exceed expectations with healthy advertising, distribution and licensing across the segments. We expect significant focus on M&A headlines that emerged overnight."
The M&A headlines McCormack is alluding to is a Wall Street Journal report saying Comcast is considering buying DreamWorks for more than $3 billion, a potential deal Comcast execs were asked about during today's call but declined to comment on.
Asked by analysts about the FCC's dismissive response to Comcast's new "Partners Program," which lets third-party device makers manufacture TV's and set-tops that work in the Xfinity TV ecosystem, Comcast chief executive Brian Roberts called the statement "unnecessary."
He said nearly 40 companies have inquired about the Partners Program since it was announced last week.
The FCC said the program doesn't go far enough, since Comcast still controls the user interface.
"That was uncalled for," Roberts added.
- read this Comcast investor relations site
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