Comcast, posted a 54 percent fall in quarterly net profit as the largest U.S. cable TV operator lost more basic video subscribers than analysts had expected, sending shares down about 8 percent.
The company said Thursday a more competitive environment and less-robust U.S. economy may have a "small impact" on its full-year operating results.
Comcast had enjoyed rapid subscriber growth in the last 18 months due to its triple-play bundles of video, high-speed Internet and phone services but executives said competition had increased significantly from satellite and telephone operators.
"We're seeing increasing competition and a softer economy and as a result a slightly slower growth rate," Chief Executive Brian Roberts said on a conference call.
Chief Operating Officer Stephen Burke said competitors are winning customers by offering aggressive price discounts.
Comcast shares were down $1.86, or 7.8 percent, to $21.99 on the Nasdaq Thursday morning after hitting a year low of $21.80. The company said it lost more than 65,000 basic video subscribers in the third quarter, exceeding the loss of 25,000 forecast by Goldman Sachs.
Analyst Thomas Eagan of Oppenheimer said Comcast had missed most of his forecasts on key third-quarter metrics due to several factors.
"They lost more basic subscribers and added less digital subscribers than we expected," said Eagan. "It's a combination of problems in their acquired cable systems, some competition and a weaker housing market."
Third-quarter net profit fell to $560 million, or 18 cents a share, from a year ago's $1.217 billion, or 38 cents per share, which included one-time transaction gains. Excluding gains Comcast's income rose 2 percent. Profit was in line with analyst expectations.
The company said revenue grew 21 percent to $7.781 billion, as the basic video subscriber losses were offset by growth in phone, Internet and digital video customers.
The Cable Guys
Wall Street analysts had on average been expecting revenue of $7.751 billion, according to a Reuters Estimates' poll. Comcast said it added a net 523,000 phone subscribers, 489,000 digital video subscribers, and 450,000 high-speed Internet subscribers.
Goldman Sachs analysts had forecast 590,000 phone subscriber additions, 500,000 digital video subscribers, as well as another 500,000 high-speed Internet customers.
Comcast also eased back on its free cash flow forecast, saying it expects to come in at least at 90 percent of 2006 levels. It had previously said it would be in line with 2006.
Craig Moffett, analyst at Sanford Bernstein, described the decision as "hardly inspiring."
Comcast said it had authorized an increase in is stock repurchase program by $7 billion to $8.2 billion. Investors have become concerned that cable companies are feeling pressures from satellite TV companies DirecTV Group and EchoStar Communications, as well as new telephone operator entrants to video such as Verizon Communications and AT&T.
Other cable stocks followed Comcast down in morning trade.
Time Warner Cable dropped 3.9 percent, while Charter Communication dropped 13.2 percent and Cablevision Systems fell 2.9 percent.
Comcast stock has fallen more than 20 percent since mid-year, leading a broad downturn for cable stocks.