Comcast reports drop in earnings
PHILADELPHIA (AP) – Comcast Corp., the nation’s biggest cable television company, reported a sharp decline in its profit for the third quarter from results a year ago that included a big gain on the sale of its interest in the home shopping network QVC Inc. Nonetheless, Comcast said it had a record number of new high-speed Internet subscribers and strong growth in its digital cable division, helping boost revenue by 12.1 percent.Comcast added 549,000 high-speed Internet subscribers – ending the quarter with more than 6.5 million – and 341,000 new digital cable subscribers. The company said it expected to add about 1 million digital cable subscribers for the year, at the top end of the previous range, and about 100,000 more high-speed Internet subscribers than it had anticipated.
“We reached record levels of new video and high-speed Internet service additions this quarter, confirming that we have successfully transformed Comcast into a new products company,” said Brian L. Roberts, Comcast chairman and CEO. For the three months ended Sept. 30, the company earned $220 million, or 10 cents per share, down from $3.18 billion, or $1.41 a share, a year ago when it had a gain of nearly $3.3 billion on the sale of its 57 percent interest in QVC. Analysts surveyed by Thomson First Call were looking for earnings of 11 cents per share for the latest quarter.
Revenues rose to $5.10 billion in the quarter from $4.55 billion a year ago.
The company said its video on-demand service continues to grow, with subscribers using it more than 50 million times a month. Comcast has hired a half-dozen staffers whose sole job is to secure programming for the service, which allows viewers to choose what they want to watch.
, when they want to watch it.
“We think video on demand is very important … a killer app for our video business,” said Steve Burke, president of the company’s cable division. “In a lot of ways, we’re creating a brand new business, but I think we are in the very early innings in terms of what that platform is going to do.”
Comcast had 21.5 million basic cable subscribers, unchanged from a year ago. The company, which had been losing basic subscribers, said it added 8,500 subscribers in the third quarter – despite losing 10,000 customers devastated by hurricanes in the Southeast.
Comcast said it could lose as many as 100,000 telephone subscribers this year, but it expects business to pick up as it switches from traditional circuit-switched phone service to Internet-based service, or VoIP. The phone business could be a “very significant growth engine in 2006 and beyond,” Burke said.
The company is nearly finished upgrading its cable network. Capital expenditures were $871 million in the third quarter, down from $1.05 billion in the year-ago quarter.
For the first nine months of the year, Comcast earned $547 million, or 24 cents a share, versus $2.86 billion, or $1.27 a share, a year ago. Revenue rose to $15.07 billion from $13.61 billion a year ago.
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AP-ES-10-27-04 1141EDT