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Comcast Reports a $153-Million Operating Loss

October 31, 2003|Sallie Hofmeister | Times Staff Writer

Comcast Corp. posted a third-quarter loss of $153 million from continuing operations Thursday, although its profit surged because of a one-time gain on the sale of its stake in the QVC shopping channel.

The loss of 7 cents a share on continuing operations for the quarter was partly attributable to a $1.14-billion write-down on the value of equipment. The quarterly loss contrasts with a profit from continuing operations of $24 million, or 3 cents, in the year-earlier period.

Although the nation's largest cable operator added a record number of lucrative high-speed Internet subscribers during the period, weaker-than-expected growth in basic-cable customers made some on Wall Street nervous.

Comcast shares dropped 22 cents to $33.40 on Nasdaq. The stock has climbed 41% this year.

Most analysts remained bullish about Comcast's future and the success of its integration of the troubled AT&T Broadband cable systems, which it acquired nearly a year ago for $51 billion. The acquisition tripled Comcast's size and has enabled the company to cut $270 million in programming costs this year.

"Comcast remains the most attractive name in the cable segment, given its ability to leverage its scale," Vijay Jayant, who follows the company for Lehman Bros., wrote in a report Thursday.

During a conference call with analysts, Comcast executives reiterated that they were a year ahead of their schedule for integrating AT&T properties. "This is really going to be a two-year process rather than a three-year process," said Chief Executive Brian Roberts.

He said the company was well on its way to bringing the operating profit margins of the AT&T cable properties closer in line with those of Comcast's systems, which now are 43%. Roberts said the former AT&T assets had an average 33% operating profit margin, an important industry benchmark. That is up from 26.4% a year before.

The company's profit for the quarter was $3.18 billion, or $1.41 a share, compared with a profit of $75.6 million, or 8 cents a share, in the year-earlier period. The profit included a one-time, $3.29-billion gain from the QVC sale to Liberty Media Corp. this year.

Revenue at the Philadelphia- based company rose 8.8% to $4.55 billion, adjusted for the AT&T acquisition.

The 473,000 high-speed-Internet customers added in the quarter bring Comcast's total to 4.9 million, up 50% from this time last year.

The company added 800 subscribers during the quarter, an improvement over a loss of 133,700 customers in the same period last year but not as good as many analysts expected. Comcast executives blamed a "redeployment of resources" to the former AT&T systems, where the majority of customers were lost last year.

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