Comcast posts 22.5 percent profit gain as NBC Universal deal looms
Comcast's strong numbers illustrate the stickiness of cable TV service -- despite a drop in subscriber growth -- at a time when consumers are cutting back on spending during the worst recession since the Great Depression.
Comcast reported net profit of $944 million or 33 cents a share, compared with $771 million or 26 cents a share one year ago. Excluding certain charges, Comcast earned 28 cents per share, exceeding Wall Street expectations of 25 cents per share. Overall revenue was up 3 percent to $8.802 billion, just missing Street forecasts of $8.850 billion.
"The strength and resilience of our businesses combined with our continued emphasis on expenses and prudent capital management helped us achieve healthy operating and financial results in the third quarter," Brian L. Roberts, CEO of Comcast Corporation, said in a statement. "We continued to execute well, maintaining our focus on balancing revenue, cash flow and customer growth while at the same time investing in attractive businesses like Comcast Business Services."
The cable giant added 361,000 high-speed internet customers in the third quarter, down 5.5 percent on a year-over-year basis, and 375,000 new voice customers in the quarter, down from 479,000 one year ago. But despite the recession, Comcast managed to squeak out more cash per customer in the period. Average total monthly revenue per video customer rose to $116.91, versus $110.67 one year ago.
"Investors should take heart that the core cable business is performing well in this reasonably hard economic environment," Chris Marangi, an analyst at Gabelli & Co. told Bloomberg. "The company appears to be focused on improving the cable business and improving customer service."
According to media reports, Comcast's bid to buy a controlling stake in NBC Universal is edging closer to completion. Per the terms being discussed, the cable giant would take control of NBC Universal with 51 percent of the new company, and contribute billions in cash as well as cable channels. General Electric (GE), which currently owns 80 percent of NBC Universal, would hold on to the other 49 percent and contribute about $12 billion in debt to the new media company.
The deal could still collapse, but assuming it closes, the tie-up could certainly be subject to regulatory scrutiny.