Comcast says considering spinoff of cable as subscribers flee

Comcast Corp. said it’s considering spinning off its cable networks into a new company as it grapples with the continuing industry-wide decline in subscribers.

“We’re going to commence a study of whether there’s a good idea in creating a new, well-capitalized company that would go to our shareholders - existing shareholders - of our cable TV networks,” President Mike Cavanagh said on a call with analysts to discuss earnings. “We’re not talking about Peacock or broadcast networks.”

In the third quarter, Comcast lost 365,000 cable-TV customers. NBCU’s cable networks include MSNBC, CNBC, E!, and Bravo, among others.

Comcast reported third-quarter sales and profit that exceeded analysts’ expectations after the company’s NBC division got a lift from the Summer Olympics, an event that generated $1.4 billion in advertising revenue. The shares were up 6.7% in premarket trading.

Sales climbed 6.5% to $32.1 billion in the third quarter, Comcast said Thursday, beating analysts’ projections of $31.7 billion. Adjusted earnings rose to $1.12 a share, exceeding forecasts of $1.06.

Other key metrics also topped expectations, including fewer losses of internet and cable-TV customers as Comcast promoted the Olympics on its TV networks and the Peacock streaming service. Earnings before interest, taxes, depreciation and amortization rose 2.3% to $9.74 billion. The stock jumped more than 5% in premarket trading in New York.

The Summer Olympics in Paris delivered a ratings bonanza for NBC after less-viewed stops in Tokyo and Rio de Janeiro. The opening ceremony drew over 28.6 million viewers, the largest audience since London in 2012. NBC also bet big on young influencers to draw fresh audiences and reignite Americans’ interest in the Games.

The Peacock service signed up 3 million new customers in the quarter, bringing its total to 36 million, benefiting from both the Olympics and an exclusive NFL game played in Brazil. The service lost $436 million, less than Wall Street predicted. Sales at Comcast’s media segment overall jumped 37% to $8.23 billion.

Revenue from the company’s film and TV studios rose 12% to $2.83 billion, driven by the success of summer films Twisters and Despicable Me 4. Sales and profit at Comcast’s theme parks declined amid an overall slowdown in the industry.

Comcast continued to lose broadband subscribers. The company parted with 87,000 internet customers, attributing most of the churn to the end of the Affordable Connectivity Program, a federal subsidy. Comcast said it gained 9,000 broadband customers, absent the impact of the program.

A month-long AT&T Inc. work stoppage in the Southeast, where the companies compete directly, helped stanch those losses in the quarter. Sales of wireless phone plans remained a bright spot with 319,000 new customer editions.