Comcast said on Tuesday that it should be big enough if its $45 billion deal for Time Warner Cable goes through and will not need to make any more major acquisitions, even as merger activity intensifies across the industry.
The company, one of the largest cable and entertainment conglomerates, is awaiting regulatory and shareholder approval for the merger with Time Warner Cable. The deal would unite the two largest cable operators in the United States and give Comcast control of about 30 percent of the cable markets in the nation, and 35.5 percent of the fixed high-speed Internet markets.
In a conference call on Tuesday to discuss its second-quarter earnings, Comcast executives were asked if the company was seeking any more deals to bolster its cable footprint. The executives said they were focused on integrating the two companies and did not expect more transactions.
“Our plate is quite full,” said Neil Smit, chief executive of Comcast’s Cable Communications group.
The proposed Comcast-Time Warner Cable merger, announced in February, has set off a wave of activity in the media industry, with AT&T Inc. announcing a $48.5 billion deal for DirecTV that would rival Comcast’s heft in the cable and satellite business. One rationale for the deals is that they would give the cable and satellite groups more leverage in negotiations with entertainment companies and help contain rising programming costs.
In turn, the $80 billion offer that 21st Century Fox made for Time Warner, which was disclosed last week, would restore some leverage to the entertainment groups.
Asked whether Comcast might make a move for another entertainment group, the company said that it was satisfied with its ownership of NBCUniversal, the film and entertainment group. “We certainly don’t think we need to bulk up in content,” said Stephen B. Burke, chief executive of NBCUniversal.
The proliferation of proposed big media mergers could put tremendous pressure on regulators to block one of them, Craig Moffett, a media analyst with MoffettNathanson, said in an analyst note. The approval of Comcast’s deal for Time Warner Cable looks “a little less inevitable than it once did,” he said.
“This is what Comcast has wrought,” he said. “All of these deals create an obvious problem for policy makers. Media consolidation is always unpopular, and all the more so now when merger mania has seemingly run amok.”
He spoke as Comcast reported net income of almost $2 billion for the second quarter of 2014, with an uptick in high-speed Internet sales offsetting lackluster revenue growth in its NBCUniversal entertainment group.
Profit increased 14.8 percent in the quarter, to $1.99 billion, with total revenue of $16.8 billion, up 3.5 percent from the same period last year.
Revenue in Comcast’s cable unit increased 5.4 percent, to $11 billion, driven by a 9.7 percent increase in sales tied to its high-speed Internet service. Revenue tied to its video business was up 1.2 percent.
Like other cable and satellite companies, Comcast is fighting to keep video customers as more people bypass cable and satellite television subscriptions in favor of cheaper streaming alternatives.
Comcast lost that battle in the second quarter, with a net loss of 144,000 video customers. That loss is an improvement from the second quarter of 2013, when the company lost 162,000 video customers. But it followed two consecutive quarters when Comcast, which is based in Philadelphia, added paying television subscribers.
Total customer losses in Comcast’s cable group came to 25,000 in the quarter, with increases in Internet and telephone subscribers making up for the loss of video customers.
Revenue in Comcast’s NBCUniversal group was relatively flat at $6 billion, with growth in its cable networks and broadcast television groups offsetting declines in filmed entertainment. Revenue from filmed entertainment tumbled 15.3 percent in the quarter, to $1.2 billion, because of a lack of theatrical releases compared with the same period a year ago.
Advertising revenue in the cable networks and broadcast television groups fell slightly in the quarter. The company attributed the decline to fewer broadcasts of “The Voice” in the second quarter this year, compared with last year.
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