Comcast profit, but getting tougher
May 5, 2008
Comcast has reported quarterly profits of $588 million excluding one-time gains, compared with $537 million last year. Last year, Comcast posted a $300 million gain from the dissolution of a cable partnership with Time Warner Cable.
Revenue was up 14 per cent to $8.39 billion in the latest quarter. Revenue rose as people spent more on cable television, which helped offset lower spending on the company’s phone and Internet services. Operating income was up 23 per cent to $1.55 billion while free cash flow – an important indicator for debt-laden industries such as cable – soared by 59 per cent to $702 million. But the slowing economy seems to have exerted a drag on signing new customers: Comcast added 1.46 million lines of service in the quarter, down 20 per cent from a year ago. The number of basic subscribers fell by 57,000, versus a gain of 83,000 a year ago. Digital cable added 494,000 subscribers compared with last year’s 658,000.
The company added 492,000 new high-speed Internet customers, down 16 per cent year-over-year. But its digital voice service added 639,000 new customers, up 9 per cent from last year. Its circuit-switched phone business, which Comcast is exiting, lost 110,000 customers. Customers spent an average of $63.46 for cable TV, up from $59.97 in 2007’s first quarter. Cable TV revenue rose by 5 per cent to $4.71 billion. For Internet service, where Comcast faces more competition, customers spent an average of $42.18, down from $43.08. Revenue for this business rose by 12 per cent to $1.75 billion. For digital phone service, subscribers spent $40.24, down from $42.44. Revenue, however, more than doubled to $573 million as the company poached customers from phone companies.