Comcast’s Q2 profit increases by 8%

Wed, 07/30/2008 - 8:45am
Mike Robuck

Comcast Corp. reported today that its second-quarter profit increased by 8 percent, due in part to more phone and broadband subscribers.

Despite the 8 percent profit, Comcast just missed Wall Street’s expectations for the quarter. Comcast posted a net income of $632 million, or 21 cents per share, compared with $588 million, or 19 cents per share, in the same time frame a year ago.

While Comcast’s revenue increased 11 percent, from $7.71 billion to $8.55 billion, some analysts were expecting, on average, a slightly higher profit of 23 cents per share on revenue of $8.58 billion.

Comcast added 278,000 broadband and 550,000 phone subscribers in the second quarter. Comcast’s high-speed Internet revenue increased 10 percent, to $1.8 billion, while video revenue increased by 3 percent, to $4.7 billion. The company’s phone revenues increased 50 percent, from $425 million to $640 million.

The increased video revenue reflected price increases for video services and growth in digital video customers, Comcast said.

“I was a little surprised at how strong their cable modem sub additions were,” said Mike Paxton, principal analyst for In-Stat’s multimedia group. “After AT&T and Verizon reported such modest gains in broadband subs, I wasn't expecting Comcast to be so strong. However, Comcast's service bundle continues to layer on broadband and telephony subs at an impressive rate.”

Earlier this year, Comcast rolled out its first wideband service offerings in the Minneapolis/St. Paul region (story here), and it plans to have the faster broadband speeds in 20 percent of its footprint by the end of the year. Comcast expects the faster speeds to woe away DSL customers who are watching more video online.

Comcast’s basic video subscribers declined by 138,000 over the past three months, after analysts had forecasted that the nation’s largest cable operator would lose 129,000 basic subscribers.

“The decrease in basic subs wasn't a huge surprise, especially during Q2, which is always a soft quarter for cable MSOs,” Paxton said. “All-in-all, a very solid quarter for Comcast.”

Comcast added 320,000 digital subscribers in the second quarter, which was below the 823,000 that were added in the same quarter a year ago.

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