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Comcast Profit Rises on Phone, Internet Gains
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Comcast, the largest U.S. cable service provider, posted a higher quarterly profit as it gained market share in phone and Internet services and controlled expenses, sending shares up 6 percent.
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AP |
Comcast reported a tripling of its free cash flow - a measurement of net cash the company prefers, largely due to a drop in capital expenditure as a slowdown in U.S. homebuilding meant that it spent less expanding its cable systems to new communities.
While that spending slowdown contributed to weaker video subscriber growth, analysts said Comcast was winning market share from phone competitors including AT&T [T
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"Free cash flow was better than we expected and that was partly due to the fewer customer adds, so they didn't incur costs of adding new subscribers," said Tom Eagan, analyst at Collins Stewart.
Shares in Comcast [CMCSA
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] rose $1.08 cents to $20.26.
Shares of Time Warner Cable [TWC
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] shares rose 4.8 percent Comcast, which has 24.6 million subscribers, said it added 278,000 high speed Internet subscribers and 500,000 phone subscribers in the second quarter.
Seven analysts polled by Reuters had on average forecast Comcast to add 327,000 new Internet subscribers and 579,000 new phone subs.
Comcast Chief Operating Officer Steve Burke told analysts on a conference call that Comcast's faster Internet access speeds are helping to win over phone company DSL customers as they want to watch more online video.
Burke said the company is also on target to add more than 2 million phone subscribers by the end of the year.
It currently has 5.6 million, making it the fourth largest U.S. phone provider.
Comcast lost 138,000 basic video subscribers during the quarter while analysts had on average been expecting the company to lose 129,000 such customers.
The cable company added 320,000 digital video subscribers, while the analysts had expected Comcast to add around 450,000.
Net profit in the second quarter rose to $632 million, or 21 cents a share, from $588 million, or 19 cents a share, a year earlier, Comcast said on Wednesday.
Revenue rose 11 percent to $8.553 billion.
Wall Street expected Comcast to post revenue of $8.574 billion and per-share profit of 22 cents, according to Reuters Estimates.
The Philadelphia-based company posted a 216 percent rise in free cash flow to $1.163 billion.
Comcast spent less on buying new digital TV set top boxes than a year ago, when it bought a significant number of new boxes ahead of a U.S. regulatory deadline to adopt a different set-top box.
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