Comcast 2Q income jumps 53%
Comcast Corp. says that profits leaped 53 percent in the second quarter even though the recession and competition squeezed its cable-TV and Internet businesses.
Comcast Corp. says that profits leaped 53 percent in the second quarter even though the recession and competition squeezed its cable-TV and Internet businesses.
Second-quarter revenues at the Philadelphia giant rose 4.5 percent to $8.9 billion, compared with $8.6 billion a year ago.
Net income jumped to $967 million from $632 million. The company's per-share earnings were 33 cents a share, which beat the consensus estimate 26 cents a share. A year ago, earnings per share were 21 cents. Lower capital investment and cost controls produced the higher profits in the 2009 period.
Comcast chief executive Brian Roberts said he was "pleased with the results" but disappointed with the low number of new Internet customers.
The nation's largest residential provider of Internet customers added 64,844 Internet customers, compared with about 325,000 new ones in the first quarter. Also in the second quarter, which ended June 30: Comcast lost 213,773 cable-TV customers, but gained 233,353 phone customers.
Stephen Burke, Comcast's No. 2 executive, said that Comcast had focused its marketing on TV's digital transition in the second quarter, seeking to capture new cable-TV customers.
Comcast also faced fierce competition from Verizon Communications Inc. and AT&T Inc. in the Internet market. The phone companies now compete with Comcast in about 28 percent of its cable franchise areas. Verizon, Comcast's biggest competitor in the Northeast, said on July 27 that it added 303,000 FiOS Internet customers in the second quarter and 300,000 FiOS TV customers.
Comcast anticipated some decline in Internet customer additions in the second quarter, which is historically a weak period for the cable company. But this quarter was worse than anticipated, Burke said.
Comcast adjusted its advertising to promote the "triple play" of cable-TV, Internet and phone, and to highlight the Internet. One new advertising campaign features basketball star Shaquille O'Neal and droll celebrity economist Ben Stein.
Comcast additions to its Internet business, Burke said, resumed at a healthy rate since the marketing adjustments. Comcast matched its second quarter for new Internet customers in July and early August.
Comcast's cable-TV subscription business appears robust, with revenue per cable-TV customer increasing 7.4 percent in the second quarter to $117.74, compared with $109.61 in the year-ago period.
A persistent weak area is advertising. Cable-TV advertising fell 19 percent. Michael Angelakis, chief financial officer, said there was no sign of a recovery in the advertising market and that cable-TV and high-speed Internet churn among customers rose in markets with high unemployment.
Comcast restarted its share-buyback program after suspending it in the credit crisis. Angelakis said the company believes Comcast shares are undervalued.
Comcast shares were basically unchanged, losing 1 cent to close at $15.05.
Comcast executives detailed several programs inside the company to upgrade its network and launch new products. They include faster Internet speeds, a conversion of its cable system to mostly digital technology, an application for the iPhone, and a wireless data service. The service, Comcast High-Speed 2go, is available in Portland, Ore., and Baltimore and could reach Philadelphia and Chicago later this year.
Roberts said the projects collectively would lead to a "technical repositioning of the company. The goal is to come out and credibly position the product as the best."
