Comcast video sub losses fall to 81K, best Q3 performance in 7 years

Comcast (NASDAQ: CMCSA) reported third-quarter net income of $2.6 billion on revenue of $16.8 billion, up 4 percent year over year and meeting the forecasts of investors.

Revenue from cable operations spiked 5.2 percent to $11.04 billion, with TV subscribers decreasing 81,000 for the quarter, a 36 percent deceleration of losses from the 127,000 reported in Q3 2013. Video subscribers for Comcast now total 22.4 million.

Comcast also added 315,000 high-speed Internet users in the third quarter vs. 297,000 in the year-ago period. Comcast now has 21.6 million broadband customers.

On the content side, NBCUniversal cable networks revenue increased 0.7 percent to $2.26 billion, with a 5.1 percent uptick in pay-TV distribution revenue offsetting a 4.6 percent drop in ad sales. Broadcast TV revenue spiked 7.7 percent to $1.77 billion, boosted by higher retransmission fees.

Theme parks, meanwhile, performed strongly, with revenue increasing 18.7 percent to $786 million. On the film side, revenue fell by 15.2 percent to $1.19 billion, based on a poor comparison to Q3 2013, which featured the box-office hit Despicable Me 2.

Facing Q&A from investors, Comcast chief executive Brian Roberts and his team were asked right away about their reaction to new over-the-top services announcements made last week by HBO and CBS. Roberts struck a diplomatic tone, noting that the programmers are "just trying to grow their businesses," but noted that recent pay-TV revenue performances show that "many people still want these bundles."

NBCU chief Stephen Burke said he sees "challenges" for both HBO and CBS' services, which he believes risks "cannibalizing" their legacy business. "I don't think distributing directly to consumers via the Internet is an easy thing to do," he said.

Addressing the deployment of the X1 platform, Roberts said the number of advanced X1 set-tops in the market has surpassed 5 million.

Comcast executives say they believe they're still on track to close their proposed $45 billion purchase of Time Warner Cable (NYSE: TWC) by early 2015, despite the Federal Communications Commission currently pausing the "shot clock" on its 180-day review of the merger. 

Burke fielded a number of questions from investment analysts regarding Comcast's cable networks, which are facing increased competition from OTT services, as well as a softening ad market. "It will be harder to get ratings over the next five years," he conceded. 

Finally, after ignoring Comcast's customer service problems during the company's Q2 report over the summer as audio recordings of a renegade Comcast rep went viral, Roberts conceded Thursday that "customer service must be our best product." 

For more:
- read this Comcast earnings release

Earnings roundup: Sizing up pay TV earnings for the third quarter of 2014

Related links:
Sizing up pay-TV earnings for the third quarter of 2014
Leahy asks Comcast to permanently get rid of fast lanes
Comcast-TWC stock price differential swells as regulatory worries set in
Comcast shareholders approve TWC purchase by 99 percent-plus margin
FCC stops 'shot clock' on Comcast-TWC review to consider more comments
Comcast says merger foes guided by self-interest, not consumer benefit
When Cohen attacks: Comcast exec lays into merger critics at commentary deadline
Comcast-TWC input period ends: 64K comments received, 65 groups urge rejection