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Comcast profit advances 16% as video-subscriber losses slow

August 03, 2011|Bloomberg News

Comcast Corp., the largest U.S. cable company, posted a 16 percent increase in second-quarter profit after adding Internet users, boosting sales at its NBC Universal unit and reducing video-subscriber losses.

Net income climbed to $1.02 billion, or 37 cents a share, from $884 million, or 31 cents, a year earlier, Philadelphia- based Comcast said today in a statement. Excluding some costs, profit was 42 cents a share, topping the 41-cent average estimate of analysts surveyed by Bloomberg. Comcast lost 238,000 video subscribers in the quarter, 10 percent fewer than in the year-ago period, when it lost 265,000.

Slowing video losses indicate Comcast is holding up against competition from AT&T Inc.'s U-verse, Verizon Communications Inc.'s FiOS, and satellite-television providers DirecTV and Dish Network Corp. It's also a sign that demand for online-video providers such as Netflix Inc. and Hulu LLC isn't increasing the rate at which customers abandon cable TV, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York.

"The cable side of Comcast is operating at a very high level and is out-executing the other U.S. operators at this point," said Moffett, who rates Comcast shares "outperform."

Cable competitors Time Warner Cable Inc. and Charter Communications Inc. both reported they lost more video subscribers in the second quarter than a year earlier.

Comcast added 144,000 broadband subscribers, up 22 percent from a year ago, and 193,000 voice customers, 16 percent fewer than a year ago.

Shares of Comcast rose 27 cents, or 1.2 percent, to $23 at 9:31 a.m. New York time in Nasdaq Stock Market trading. They had risen 3.5 percent this year before today.

Revenue rose 9.4 percent to $14.3 billion. That compares to an average estimate of $13.8 billion from analysts in a Bloomberg survey. Thirty-six percent of Comcast's sales came from NBC Universal in the quarter, which had $5.18 billion in revenue compared with $4.42 billion a year ago. Comcast bought 51 percent of NBC in January from General Electric Co. for $13.8 billion in cash and assets.

Broadcast television revenue for NBC was $1.7 billion, up 19 percent from a year ago. NBC's broadcast-TV advertising revenue rose 6.8 percent to $1.11 billion even though its regularly scheduled primetime programming trailed its network competition -- CBS Corp.'s CBS, News Corp.'s Fox and Walt Disney Co.'s ABC -- in ratings in the season ended in May, according to data from Horizon Media Inc.

Cable-network revenue, which includes NBC Universal stations such as Bravo, MSNBC, and USA and Comcast-owned networks E! and Golf Channel, rose 13 percent to $2.17 billion.

"Comcast is pulling all of the right levers," said Paul Sweeney, an analyst at Bloomberg Industries in New York, before the results were released. "They're getting ad revenue at NBC and the cable stations, they're buying back stock and they're paying a dividend to shareholders."

Comcast boosted its annual dividend in February by 19 percent to 45 cents a share and paid out $311 million in the second quarter. The cable provider bought back $525 million in shares this quarter and has $1.09 billion remaining in its board authorization.

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