[opendtv] News: Comcast Profit Rises 64% on Digital TV and Internet Services
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 3 Aug 2005 09:04:17 -0400
http://www.nytimes.com/2005/08/03/business/businessspecial3/03comcast.html?th&emc=th
Comcast Profit Rises 64% on Digital TV and Internet Services
By KEN BELSON
Published: August 3, 2005
The Comcast Corporation, the country's largest cable provider, said
yesterday that profits jumped 64 percent in the second quarter,
buoyed by demand for digital television and high-speed Internet
services.
The company, which has 21.4 million television subscribers, earned
$430 million, or 19 cents a share, in the quarter that ended June 30,
compared with $262 million, or 12 cents a share, in the same period
last year.
Comcast is a bellwether for the industry, and like its rivals it has
been trying to sign up more customers for digital television packages
that provide high-definition programming, more channels and access to
video-on-demand.
It added a better-than-expected 284,000 digital television
subscribers in the quarter. As a result, 9.1 million, or 43 percent,
of its customers now have digital services, which typically cost $10
to $15 a month more than basic cable plans. At the same time, Comcast
lost 77,000 basic cable customers, about twice what analysts had
expected.
The country's largest provider of high-speed Internet service with
7.7 million subscribers, Comcast added 297,000 broadband customers,
which was slightly below analysts' forecasts.
Total revenue grew 10.5 percent, to $5.6 billion, in line with
expectations of analysts. The company did not adjust its full-year
targets.
Brian L. Roberts, Comcast's chairman, said he expected the company to
continue generating double-digit growth in operating cash flow, free
cash flow and revenue, critical indicators of a cable company's
health.
"We believe these kind of results are sustainable" for the next
several years, Mr. Roberts told analysts in a conference call.
The strong report lifted the company's shares 39 cents, or 1.3 percent, to $31.
Revenue from high-speed Internet services jumped 29 percent, and
Comcast's broadband customers spent $43.34 a month on average, a
53-cent increase from the first quarter this year.
Analysts have been monitoring the number of new Comcast broadband
customers to gauge how heavy discounts on broadband service being
offered by the Bell companies has affected the cable industry. "The
pricing environment hasn't been as destructive as people feared,"
said Douglas Shapiro, a cable analyst at Banc of America Securities,
speaking of concerns that the Bells' discounts would force the cable
companies to reply in kind. "All the focus on pricing is a bit
misguided."
Comcast, however, has been slow to introduce Internet-based phone
service, which is seen by analysts as the next big opportunity for
cable providers, and crucial in their battle to win customers from
the Bell companies. Digital phone service is profitable because it
can generate $40 or so a month for each customer, but is inexpensive
to introduce.
Comcast added 15,000 Internet phone customers, for a total of 22,000,
just a fraction of the more than 400,000 phone customers that Time
Warner Cable and Cablevision each have already acquired. Comcast's
late start, analysts said, is one reason the company's stock has
declined 6.9 percent this year.
Still, Comcast, which now provides the digital phone service in
Boston, Chicago, Hartford, Philadelphia and Portland, Ore., expects
the number of subscribers to grow rapidly once the service is
introduced in more markets and the company begins marketing the
service aggressively.
The company said it expected 250,000 digital phone subscribers by the
end of the year and about a million new phone customers in 2006.
"We're now in full deployment mode," said Stephen B. Burke, Comcast's
chief operating officer.
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