Despite the economy and increased competition from telcos, Comcast posted a 12 percent increase in its first-quarter profit, thanks in part to increased advertising revenues and the addition of more subscribers.
With Verizon and AT&T throttling back on their video rollouts, Comcast seems to have weathered the competitive storm, but the nation’s largest cable operator remained cautious about future quarters due to the housing market and unemployment.
"While it's not clear whether we're entirely out of the woods on the economy, we are cautious and optimistic and are clearly executing better in this environment and against the competition," said Comcast Chairman and CEO Brian Roberts in a Dow Jones Newswires story.
Comcast’s first-quarter net income rose to $866 million, or 31 cents per share, from $772 million, or 27 cents per share, in the same quarter a year ago. Comcast’s revenue increased 3.8 percent from $8.9 billion to $9.2 billion. According to Thomson Reuters, analysts had expected a profit of 30 cents on revenue of $9.15 billion.
The company’s free cash flow rose 38 percent to $1.89 billion due to Comcast trimming its capital expenditures by 19 percent.
"Our healthy operating and financial results for the first quarter mark a solid start to 2010,” Roberts said. “First-quarter results were driven by robust customer growth, a rebound in advertising, momentum in business services, and our continued focus on expense and capital management. We've also made significant progress in deploying all-digital and DOCSIS 3.0, or wideband. These are strategic initiatives that will further enhance our superior products, strengthen our competitive position and build long-term value for our shareholders."
Comcast’s cable segment revenue increased 3.5 percent to $8.7 billion, compared with $8.4 billion in the first quarter of 2009. Comcast’s advertising revenue rose 23.5 percent to $360 million, while revenue for Comcast’s business services was up 49 percent.
Comcast’s digital voice revenue increased by 13 percent, while data revenue increased by 9 percent, but video revenue was down 2 percent.
Comcast added 399,000 high-speed Internet subscribers, for a 21 percent increase over the previous year, and 273,000 phone customers in the quarter, but it lost 82,000 basic video customers.
While Comcast lost video subscribers, the monthly average total revenue per video customer increased 6.3 percent to $122.98 due to customers taking multiple products.
As of March 31, Comcast's video, high-speed Internet and voice customers totaled 47.7 million, reflecting 590,000 net additions during the first quarter of 2010.
During the first quarter, Comcast repurchased 19.2 million of its common shares for $300 million. As of March 31, Comcast had approximately $3 billion of availability remaining under its share repurchase authorization. The company also paid cash dividends totaling $268 million in the first quarter.