Ad, Internet gains give Comcast Q1 boost

A rebounding market for cable TV advertising and new Internet and phone customers helped Comcast Corp. report higher first-quarter revenue and profit.

Chief executive officer Brian L. Roberts said Wednesday that the cable giant had a "solid start to 2010" and that the company saw a "real turnaround in advertising."

Ad revenue increased 23 percent in the quarter compared with the year-earlier period, the company said.

Consolidated revenue rose 3.8 percent in the quarter to $9.2 billion, and profit rose 12.2 percent to $866 million.

Continuing a troubling trend, the company lost 82,000 cable TV customers, compared with a loss of 78,000 in the year-earlier period. Comcast said the loss came as telephone companies expanded their competitive threat in its franchise areas.

Total revenue in the cable TV division fell to $4.84 billion in the first quarter from $4.93 billion in the year-earlier quarter because of customer loss and Comcast's decision to delay rate increases, the company said.

Comcast has diversified revenue sources in the last several years, anticipating that it would shed cable TV customers because of competition from satellite TV, online video, and telephone companies.

During the first quarter, Comcast said, it added 399,000 high-speed Internet customers, up from the 329,000 new customers in the same period a year earlier.

In a conference call, chief operating officer Stephen Burke said it appeared Internet customer additions were accelerating 10 years after the product was first offered - probably, he said, because of cable TV's investment in faster Internet speeds that phone-company DSL service could not compete with.

The rebound in advertising was broad across industry sectors and a relief, Burke said, when compared with trends during the deepest part of the recession.

"It's kind of scary when you are down 20 percent and wonder whether the business will come back," he said. Advertising "is a striking indication that businesses are feeling better about their prospects and are willing to spend."

Comcast spent 16 percent more on its own marketing in the first quarter compared with the year-earlier period because of its Xfinity re-branding campaign.

Investments in all-digital technology and service-call centers are leading to fewer "truck rolls" by Comcast technicians and lower operating costs, Burke said.

Government scrutiny of Comcast's bid to acquire a controlling interest in NBC Universal Inc. appears to be progressing, Roberts said, adding that he hopes to have a final answer from regulators on the $30 billion deal by the end of the year. Also awaited are approvals from the Federal Communications Commission and the Justice Department.

Joining executives for the first time on a conference call with Wall Street analysts was Neil Smit, new president of the cable division, who joined Comcast in January from Charter Communications Inc., a Midwest cable company. Smit said he hoped to transform the customer experience.

Comcast shares closed Wednesday at $18.81, up 35 cents.