[opendtv] News: Comcast profits up nearly fivefold

http://www.businessweek.com/ap/financialnews/D89OKFGO0.htm?campaign_id=apn_home_down
 


Comcast profits up nearly fivefold

APR. 28 4:29 P.M. ET  Comcast Corp., the nation's largest cable 
television company, said Thursday its profit nearly quintupled in the 
first quarter, as hundreds of thousands of customers signed up for 
its premium cable and Internet services.

  Comcast earned $313 million, or 14 cents a share, compared to $65 
million, or 3 cents a share, in the first quarter of 2004. Analysts 
surveyed by Thomson First Call had predicted earnings of 11 cents a 
share.

  The cable operator reported first-quarter revenues of $5.36 billion, 
up from $4.91 billion in the year-ago quarter.

  Comcast said the results were buoyed by growth in its cable and 
content divisions and improved operating margins.

  "Comcast has never had more potential for growth or been in a better 
position to take advantage of those opportunities," said Brian L. 
Roberts, Comcast chairman and chief executive officer.

  The Philadelphia-based company's shares declined 4 cents to close at 
$31.88 in Thursday trading on the Nasdaq Stock Market. The stock has 
traded in a 52-week range of $26.25 to $34.50.

  Comcast lost 29,000 cable customers overall in the first quarter, 
but added to revenues by gaining 200,000 subscribers to its digital 
service, which is more expensive than older forms of cable.

  Of Comcast's 21.5 million cable customers, about 41 percent, or 8.85 
million, get the digital service. Comcast Cable President Steve Burke 
said he anticipated penetration to eventually top out at 55 percent.

  In March, digital customers viewed more than 100 million On Demand 
programs, three times the number in March 2004 and a 40 percent 
increase over the fourth quarter. Company officials have called 
video-on-demand a "killer app" for the cable business.

  Analysts said they were impressed with the results, especially 
because the company cable operating margins were up 2 percent, 
despite the higher cable programming costs that kick in Jan. 1.

  "For them to have such strong growth indicates good operating 
momentum throughout the rest of the year," said Mike Kupinski of A.G. 
Edwards & Sons Inc.

  Analyst Craig Moffett of Bernstein & Co. said good news clearly 
outweighs the bad, but investors will be disappointed by the net loss 
of cable subscribers.

  "While financially the difference between a 30,000 sub 
(subscription) gain and a 30,000 sub loss is trivial, for better or 
worse, the basic sub additions are viewed as a litmus test for the 
competitive health of the business," he said.

  High-speed Internet revenue rose 32.5 percent to $925 million as 
Comcast added 414,000 broadband customers, ending the first quarter 
with 7.4 million. Broadband penetration has still reached just over 
18 percent of available homes, which "gives us lots of upside," Burke 
said. "This business is one that is going to continue to fuel our 
growth for many years to come."

  For the year, Comcast said it anticipates growth in operating cash 
flow of 14 percent to 15 percent, up from the previous guidance of at 
least 12 percent. The company also expects capital expenditures to 
increase by $200 million to $300 million more than previously 
thought, reflecting strong demand for high-definition set-top boxes.

  Comcast and Time Warner Inc. announced last week they would buy the 
assets of Adelphia Communications Corp., the bankrupt cable TV 
company now based in Colorado, for $17.6 billion in cash and stock. 
Comcast will get 1.8 million additional subscribers.

  The deal "will allow us to expand our footprint and accelerate the 
deployment of our advanced services even further," Roberts said.

  Also Thursday, Comcast's board authorized the repurchase of an 
additional $2 billion in stock.

  ------

  On the Net:

  Comcast: http://www.comcast.com
 
 
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