Comcast shares are bucking the trend: while the Dow is down by triple digits, Comcast shares are higher on earnings that bested Wall Street expectations. The "triple play" is paying off. Comcast's upside surprise comes from signing on more valuable customers, who are paying not just for cable, but also high-speed Internet and voice.
Excluding one-time items, earnings per share come in at 32 cents, topping Wall Street projections of 30 cents. Revenue also beat projections, growing 7.3 percent from the year ago quarter to $9.489 billion. The cost of closing the NBC Universal (GE is NBC and CNBC's parent company ) deal continues to weigh on Comcast's balance sheet — a charge of one penny for share — but the company says it's on track to close by the end of the year.
Comcast lost 275,000 cable subscribers last quarter, for a total of 622,000 lost in the first three quarters of the year. That's more than expected, especially considering the strong results from Verizon FiOS . But the company says that trend is starting to turn around, with numbers improving in October. Here's the key thing: the company says this is *not* primarily a result of consumers "cutting the cord" to watch content on Hulu and other websites. Yes, the company does see some subscribers shifting to Internet-enabled web video services. But Comcast says it's really a poverty problem — the lowest-tier subscribers are dropping out, while the customers it's retaining are spending more than ever: $130 per month.
This question of whether consumers will "cut the cord" to their TV subscription is becoming increasingly prominent. The number of Internet-enabled options — called "over the top services" — is exploding. And that raises questions about the line Comcast is drawing between different varieties of consumer incentives — does it matter whether consumers are 'cutting the cord' because they want to watch Hulu or simply because their cable bill is too hefty? Aren't those two intertwined? This is all driving the expansion of "Xfinity," Comcast's TV Everywhere service, which gives consumers extra incentive to keep their subscriptions.
Comcast's numbers bode well for upcoming media earnings reports: local advertising revenue grew 27 percent, bolstered by a rush of political ads. And Comcast's programming unit grew revenue 8.7 percent in the quarter on strong ad sales at its channels including E! Questions? Comments? MediaMoney@cnbc.com
Questions? Comments? MediaMoney@cnbc.com