Comcast’s first-quarter earnings beat analysts’ estimates as the largest U.S. cable television operator boosted revenue with more high-speed Internet and telephone subscribers. Cable subscriber numbers were little changed amid increased competition from satellite and fiber-optic television operators.
Net income fell 13% to $732 million, or 24 cents a share, from $837 million, or 26 cents, a year earlier, while revenue increased 14% to $8.39 billion, the company said in a statement this morning. Excluding one-time gains both this year and last year, profit rose 9.5% to $588 million.
Comcast’s Internet and phone revenue rose 12% and 65%, respectively, as the company bundled those services with its cable offerings to attract customers.
Comcast also launched a video-on-demand service in January that will have a high-definition content inventory of more than 1,000 TV show and movie choices a month by the end of the year. That service helped Comcast boost cable-based sales by 5%, despite a subscription base that shrunk slightly.
Subscription levels “exceeded expectations across virtually every product line,” wrote Bear Stearns analyst Spencer Wang in a note to clients today. “High-speed data net additions were particularly strong.”
Comcast was expected to earn 19 cents a share on $8.17 billion in revenue, the average analyst estimates in a Thomson Financial survey.
Comcast’s 24.7 million cable subscribers were little changed from a year earlier, despite growth of satellite operators such as DirecTV and newer fiber-optic services like Verizon’s FiOS and AT&T’s U-verse. Verizon said this week that its FiOS subscriber base has tripled over the past year to 1.2 million. DirecTV and No. 2 satellite operator Dish Network will release their first-quarter earnings later this month.
“Our performance demonstrates that our operating strategy is working in an economic and competitive environment that continues to be challenging,” said Brian Roberts, Comcast’s chief executive officer, in today’s statement. “We are confident that our outlook for 2008 is achievable and we are on track to deliver on our goal of consistent and profitable growth.”
Comcast reiterated its February forecast that 2008 revenue would rise 8% to 10%, or to $33.4 billion to $34 billion. Analysts forecast 2008 sales of $34.1 billion.
Investors were pleased with the company’s results as Comcast shares rose as much as 8.7% today. Before today, the stock had fallen 23% in the past year, compared with a 4.4% decline for the Nasdaq.
On Wednesday, Time Warner Cable reported first-quarter earnings that fell less than analysts expected as the next-largest U.S. cable operator also appeared to stave off competition from satellite and fiber-optic operators. Time Warner Inc. said it would sell its majority stake in the cable company “soon.”