Comcast sales up, earnings flat
October 26, 2007
Comcast earnings fell sharply in the third quarter in the context of a year-earlier gain related to its acquisition of cable systems from Adelphia Communications. Comcast’s net income fell 54 per cent to $560 million (E391m), compared with $1.22 billion, a year earlier. Most of the profit decline came from a year-earlier gain of $669 million related to Comcast’s acquisition of cable systems from Adelphia. Excluding those gains, Comcast’s net income rose 2 per cent. Revenue climbed 21 per cent to $7.78 billion from $6.43 billion.
Comcast’s results underscore cable companies continued flagging growth rates of basic-television subscriptions and high-speed Internet. Investors have revised their expectations for Comcast and its peers amid stiffer competition from satellite-TV companies and new services such as Verizon's FiOS. Cable stocks have fallen since the summer, with Comcast’s Class-A shares down nearly 20 per cent in three months.
As Comcast rolls out new services, it has also ramped up capital spending, which increased 20 per cent in the quarter to $1.5 billion. Comcast has cautioned investors about higher capital spending this year.