TMCnet News
Comcast 4Q Beats Expectations(AP Online Via Thomson Dialog NewsEdge) PHILADELPHIA_Comcast Corp., the nation's largest cable operator, reported a 54 percent increase in fourth-quarter profit on solid revenue gains as customers spent more for cable TV. In a bow to the desires of agitated shareholders unhappy with its weakened stock price, Comcast also said it will start paying a 6.25-cent quarterly dividend starting at the end of April. Moreover, the Philadelphia-based company is pledging that by the end of 2009, it will spend the remaining $6.9 billion it has allotted to buy back shares _ in a bid to satisfy a growing chorus on Wall Street to step up its repurchases. Shares jumped more than 7 percent, or $1.28, to $19.09 at the open of trading. In the fourth quarter, Comcast reported a net income of $602 million, or 20 cents per share, compared with $390 million, or 13 cents, in the same period a year ago. Analysts surveyed by Thomson Financial were expecting profit of 17 cents per share. Operating cash flow in the quarter was $3.08 billion, up 19 percent year-over-year, while free cash flow tripled to just a tad over $1 billion. Revenue was up 14 percent to $8 billion, beating Wall Street's $7.9 billion average forecast. The company added 1.2 million revenue generating units _ the number of services sold and a key metric of performance _ down from 1.6 million in 2006. For the year, Comcast posted a 2 percent increase in profit to $2.59 billion, or 83 cents per share, as revenue rose by 24 percent to $30.9 billion. Among its business segments, Comcast said video revenue rose by 6 percent to $4.5 billion in the quarter. The average cost per customer rose to $61.72 a month from $58.19, which could be a combination of higher prices and more services ordered. The number of basic subscribers fell by 94,000, compared to a gain of 111,000 in 2006. Even its digital sign-ups slowed, adding 523,000 compared with 614,000 in the prior year. Comcast's high-speed Internet business saw a 14 percent revenue gain to $1.7 billion. But the company added 331,000 new customers compared with 490,000 in 2006. The average cost per customer fell, as well, to $42.44 from $42.89 a month, perhaps reflecting the effect of competition. Comcast's phone revenue rose by 73 percent to $523 million. The company signed up 604,000 digital voice subscribers compared with 510,000 in the prior year. However, its circuit-switched business lost 128,000 accounts as Comcast continues to exit this market. The average cost per digital voice customers fell to $40.34 a month from $43.05. Comcast said capital expenditures were $1.5 billion in the quarter, up from $1.4 billion. In past quarters, Wall Street had been concerned about increases in the company's capital spending. Looking ahead, Comcast is projecting an 8 to 10 percent growth in overall revenue and operating cash flow for 2008. It also expects to post free cash-flow growth of at least 20 percent and capital expenditures should fall as a percentage of revenue. Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |