Comcast Earnings In-Line, But Sub Growth Is Soft
Basic Subscribers Flat, but Triple-Play Services See Increases
By Jon Hemingway -- Broadcasting & Cable, 10/25/2007 5:59:00 AM
Comcast reported third-quarter earnings of $0.18 per share, which was in line with consensus Wall Street estimates, but subscriber growth was softer than expected.
The nation’s largest cable operator saw revenue for the quarter rise 21% to $7.78 billion from $6.4 billion. Operating cash flow was up 20% to $2.9 billion while operating income was up 14% to $1.4 billion. The company’s net income slid 54% to $560 million from $1.2 billion.
“We once again posted double-digit growth in revenue and operating cash flow, our two most important metrics,” Comcast Chairman/CEO Brian Roberts said in a statement. "Our business continues to perform well both operationally and financially.”
But soft subscriber metrics concerned investors, and cable stocks suffered as a result. Comcast saw a 65,000 decrease in basic cable subscribers in Q3 while net digital subscriber additions slowed to 489,000 from 559,000 in the same quarter a year ago. Slower growth was also recorded in broadband net additions, to 450,000 versus 536,000.
The company’s cable segment added 1.4 million revenue-generating units (RGUs) in the third quarter to bring the total number of RGUs to 55.8 million, 13% higher than Q3 2006. Comcast said it is adding RGUs at a greater rate in 2007 than in 2006 as the 4.8 million adds year-to-date represent a 40% increase over the same period a year ago. But Q3's 1.4 million was off from the 1.5 million added in the comparable 2006 period.
“Investors may be tempted to blame escalating competition, but the macro-economy likely is a more important factor in today's results,” says Sanford Bernstein analyst Craig Moffett, “TelCo video competition – despite inordinate investor attention – is available to just 4% of Comcast's footprint, and remains too small to be a significant factor. With 40% of the U.S. covered by Comcast's massive footprint, the company is simply too large to run away from the macro-economy.”
In the programming segment -- which includes network assets such as E! Entertainment Television, The Golf Channel and Versus -- revenue rose 27% in Q3 to $330 million.
The company also announced a $7 billion addition to its share-repurchase program, bringing the total authorized amount under the program to $8.2 billion. Comcast repurchased $600 million in the quarter and $1.85 billion year-to-date.
Cable stocks sank with the broader market Thursday in the wake of industry leader Comcast’s release with Comcast trading through its 52-week low to close down over 10% at $21.28; Time Warner Cable trading through its 52-week low to close down over 8% at $29.40; Charter sliding over 22% (or $0.58) to $1.97; Cablevision dropping over 4.50% to $29.40 and Mediacom trading down 6.25% to $5.70.
-
How come there's no mention of G4 in their statements?
Pablo Bloque - 10/29/2007 4:46:00 PM EDT
No related content found.
-
No Top Articles
Featured Company
-
Parks Associates
Parks Associates is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups throug..more
VIEW ALL GALLERIES
