Comcast Corp and Time Warner Inc reported stronger quarterly results on Wednesday, confirming that it pays to have a solid lineup of cable networks - at least while advertisers keep spending. Against all odds, advertisers continue to scoop up commercial time on television, and cable networks including Time Warner's TNT and Comcast's USA have been major beneficiaries. Subscription fees have only helped.
That point was driven home on Wednesday when Time Warner reported revenue from its cable networks rose 7 percent. Comcast, whose cable business is run through its majority interest in NBC Universal, posted a 12 percent increase. "Cable networks drive the profitability of NBC Universal and they continue to perform well," said Comcast Chief Executive Brian Roberts, who has staked his reputation on last year's $30 billion deal for NBCU.
Comcast's cable network results stand out even more compared with the performance of its flagship broadcast TV network NBC, whose prime-time schedule has struggled for years. Already NBC has cancelled two shows it just rolled out for the new TV season, "Playboy Club" and "Free Agents." At Time Warner, where CEO Jeff Bewkes wants to focus the company squarely on creating content for TV, movies and magazines, advertising sales climbed 6 percent.
It cited strong pricing at its Turner networks, home to original shows such as "The Closer," the late-night talk show host Conan O'Brien, news on CNN and sports including basketball and auto racing. Bewkes also continued to champion TV Everywhere, an initiative to bring more TV shows online for paying cable subscribers, especially those who subscribe to HBO and other premium channels.
Overall, Time Warner Inc's adjusted earnings rose a better-than-expected 27 percent to 79 cents a share despite a dip in adjusted operating profit at its cable networks. That dip caused Time Warner Inc's shares to fall as much as 3.7 percent on Wednesday.
Heading into Wednesday, the economy was a major question facing media companies, particularly Comcast. Not only does Comcast rely on advertising from its TV networks, but its chief business of selling broadband, video and telephone services relies heavily on the housing market and consumer confidence.
Overall, it added 229,000 telephone, video and Internet customers. That satisfied Wall Street and calmed worries that arose last week when Time Warner Cable and Cablevision Systems posted disappointing subscriber numbers. Comcast reported third-quarter net income of $908 million, or 33 cents a share, up from $867 million, or 31 cents a share, in the period a year ago.