Comcast Corp. (Nasdaq: CMCSA), the U.S. cable company awaiting regulatory approval to buy Time Warner Cable Inc. (NYSE: TWX), reported profit that beat estimates as new high-speed Internet customers more than made up for declining video subscribers.

Third-quarter earnings were 73 cents a share, excluding tax adjustments and acquisition-related expenses, Comcast said today in a statement. That topped the 71 cents that analysts projected on average, according to estimates compiled by Bloomberg. Revenue rose 4 percent to $16.79 billion, just shy of the $16.81 billion estimated by analysts.

Cable operators like Comcast are relying more on broadband users for revenue growth as new TV subscribers are harder to come by. More content is being offered via online services like Netflix Inc. and HBO’s upcoming online subscription, encouraging cable customers to cut the cord. The increasing reliance on broadband sign-ups is helping boost profit margins, according to David Heger, an analyst at Edward Jones & Co.

“From the point of view of a cable company, you really want to see broadband growth more so than cable-TV growth because it’s much more profitable,” Heger, who has a buy rating on the stock, said in an interview before the earnings release. “For a Comcast, it’s really broadband and a bigger push into the business market” that are fueling growth, he said.

The Philadelphia-based company signed up 315,000 new broadband customers in the quarter. That was better than the 288,000 and 300,000 additions estimated by Matthew Harrigan, an analyst at Wunderlich Securities, and Todd Mitchell, an analyst at Brean Capital, respectively. TV subscribers fell by 81,000, better than the drop of 127,000 a year ago.

Comcast’s third-quarter net income rose to $2.59 billion, or 99 cents a share, from $1.73 billion, or 65 cents, a year earlier.

A customer’s average monthly bill rose to $137.24 a month. More than a third of Comcast’s customers subscribe to all three services: Internet, voice and video.

Comcast’s proposed $45.2 billion takeover of Time Warner Cable, the second-largest U.S. cable-TV company, is at risk of taking longer to complete as regulators resolve disputes over programming contracts. The Federal Communications Commission yesterday stopped the clock in its review and suspended deadlines for comments in this deal, as well as AT&T Inc.’s agreement to purchase DirecTV.

“Since the deal was announced, it’s been a cloud of uncertainty,” Heger said. “It’s been a big factor on why the shares have been underperformers this year.”

Through yesterday, Comcast shares had fallen 6.8 percent since the Time Warner Cable deal was announced in February. The Standard & Poor’s 500 Index has increased 5.9 percent during the same period.

For Comcast, the merger is, in part, being motivated by the falling number of Americans paying for TV. That’s left companies focused on retaining customers instead of chasing new ones.

Comcast is also facing skeptical consumers who routinely rate it among the worst for customer service in the U.S. Earlier this month, a former employee of PricewaterhouseCoopers LLP sued Comcast and claimed the company ruined his professional career. The cable operator had previously apologized publicly, while denying that any of its employees asked that he be fired.

Sales at Comcast’s NBCUniversal group rose 1.2 percent to $5.92 billion, driven by higher revenue from the theme parks, as well as broadcast and cable networks.

The film division, which includes the Universal Pictures studio, generated $1.19 billion in sales, a 15 percent drop from a year ago when the studio released the sequel in the lucrative “Despicable Me” franchise.

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.