Comcast Corp's profit rose 5 percent thanks to healthy results from its cable business, calming recent worries that the industry was succumbing to pressures from a weak economy and poor housing market.
Comcast relied on its cable business to offset a weak quarter from two of its newer media properties, the NBC television network and Universal Pictures.
Unfortunately, the public face of NBC Universal is the broadcast network and that is just struggling, said Craig Moffett, an analyst with Sanford Bernstein. The turnaround of a television network doesn't happen overnight. They are showing a lot of resolve but it is not an easy challenge.
The largest U.S. cable operator, and majority owner of NBC Universal, reported third-quarter net income on Wednesday of $908 million, or 33 cents a share, up from $867 million, or 31 cents a share, in the period a year ago.
Analysts expected Comcast to report earnings of 40 cents a share, according to Thomson Reuters I/B/E/S. Comcast blamed part of the shortfall on swings in its investment income from quarter to quarter.
Revenue rose about 5 percent to $14.3 billion.
While Comcast lost basic video customers, it slowed the bleeding during the quarter, losing 165,000 customers compared to a 275,000 in the period a year ago. It also added a better-than-expected 261,000 Internet subscribers.
Overall, it added 229,000 telephone, video and Internet customers, which calmed worries that arose last week when Time Warner Cable and Cablevision Systems Corp, two rivals, posted disappointing subscriber numbers.
While cable companies have been losing customers to phone companies such as Verizon Communications, a more immediate worry has been the economy. Without jobs, people are far less likely to pay up for premium cable packages; and if they aren't moving into new homes, they aren't signing up for new services.
Cablevision's earnings report sent its shares plunging as much as 16 percent on Friday and dragged down other stocks in the sector, including Comcast, Time Warner Cable, Dish Network and DirecTV.
In the context of relatively weak results from Time Warner and Cablevision last week, these results were a welcome relief, Moffett said of Comcast's numbers.
Revenue from Comcast's cable business climbed 5 percent.
NBC Universal also posted higher revenue, but the cost of investing in the media division hurt its profit. The NBC broadcast network, which Comcast has said is a long-term turnaround project, posted a operating cash flow loss of $7 million. And its Universal Pictures movie division saw its profit drop by 17 percent.
Comcast shares crept up 1.6 percent to $23.35 in light premarket trading.
(Additional reporting by Jim Finkle in New York; Editing by Derek Caney)