Comcast Enjoys a Broadband Bounce
By George Mannes
10/30/2003 11:37
Just a month after completing its latest big deal, Comcast CMCSA reported a mostly positive quarter Thursday.
The big Philadelphia cable operator said third-quarter cable revenue was on the light side, but the company met or exceeded bottom-line and operational expectations.
Showing particular strength in the the addition of high-speed Internet customers, Comcast -- like fellow cable operator Cox COX , which reported earlier this week -- appears untouched by competition from telcos in the broadband market, and is evidently bouncing back from seasonal weakness in the second quarter.
On a conference call with analysts Thursday morning, Comcast President Brian Roberts spoke proudly of the company's turnaround of systems acquired a year ago from AT&T T , and crowed about the strong cable-modem performance. "In my opinion, the news of the quarter is high-speed data," he said.
Comcast's stock, which has risen from $21.85 to as high as $34.85 over the past year, fell 94 cents Thursday morning to trade at $32.68.
For the third quarter ended Sept. 30, Comcast -- the nation's largest operator of cable TV systems -- reported cable system revenue for the quarter of $4.37 billion, shy of the $4.4 billion to $4.5 billion range of analysts' estimates, according to TheStreet.com's informal survey. That number is up 8.4% from the $4.04 pro forma figure for the third quarter of 2002. Comcast closed its acquisition of the old AT&T Broadband systems in the fourth quarter of 2002.
Operating income before depreciation and amortization for the cable systems amounted to $1.62 billion, up 24% from last year's pro forma figure, excluding 2002 AT&T merger and termination charges. This year's number, in line with analysts' estimates, represents an operating cash flow margin of 37%, up from the 29.7% figure for the third quarter of 2002.
Comcast's companywide revenue dropped more than $1 billion from second-quarter figures, resulting from the company's mid-September sale of its majority stake in QVC to partner Liberty Media L . QVC is treated as a discontinued operation in this quarter's results.
In the third quarter, Comcast added 473,000 cable-modem subscribers, up from the 339,000 pro forma figure for the third quarter of 2002, and up from the second-quarter addition number of 351,000. Analysts surveyed by TheStreet.com had forecast additions of 445,000 at most.
Comcast raised its guidance for full-year 2003 high-speed net data additions from 1.6 million to 1.7 million.
The company added 800 subscribers in the third quarter, keeping its total basic cable subscriber count at 21.4 million. The company lost 134,000 subscribers on a pro forma basis in the third quarter of 2002, nearly all of them at the AT&T Broadband systems.
Comcast said it now expects to lose 175,000 telephone customers in 2003, not the 150,000 it previously expected. The company has in the past made it clear that it has put its phone operations, mostly inherited from AT&T, on the back burner as it focuses first on developing other advanced services and products, such as video-on-demand and digital video recorders. |
