Comcast turns in shiny Q1
Comcast beat analyst expectations for its first quarter, with growth in revenue across all of its communications services. CEO Brian Roberts said the company was also encouraged by the seamless integration with NBCUniversal during the first full three months of having that acquisition officially on the books.
The company lost the lowest amount of basic video customers in four years – just 39,000. It ended the quarter with 22.7 million TV subscribers. At the same time, Comcast added 418,000 Internet accounts and 260,000 VoIP accounts, for a net addition of 639,000 revenue-generating units (RGUs), for a total of 49 million at the quarter's end.
Comcast said it is working on customer retention by improving customer service and encouraging the adoption of bundles, and those plans seem to have met with some success during the first quarter. With more customers expanding their bundles, ARPU increased 9.3 percent to $132.91.
With Netflix eclipsing Comcast in terms of individual accounts, and with Comcast, Time Warner Cable and Charter Communications all reporting their earnings recently, interest remains keen to detect any evidence of cord-cutting. There is still minimal evidence of cord-cutting in the MSOs' numbers this week.
On the other hand, Nielsen reported this week that the number of TV-owning households went down for the first time in years, suggesting that while few people may be cutting any cords, some people – specifically younger viewers – might not be connecting any cords in the first place, metaphorically speaking.
Comcast's capital expenditures in its cable business increased 15.4 percentto $1.1 billion compared with the first quarter of 2010. The spending went for customer premises equipment (CPE) associated with the company's all-digital initiative, as well as for network equipment to accelerate DOCSIS data speeds and to support growth in business services.
Revenue increased across all three residential services. Advertising revenue was up, and business services revenue increased nearly 50 percent.
During the quarter, the company bought back 23.3 million shares for $525 million. The company still has another $1.6 billion allocated for buying back stock.
Revenue was down at NBCUniversal, but that was attributed to the bounce the company got a year ago from broadcasting the Winter Olympics. If those broadcasts were factored out, revenue would have increased by 5 percent, Comcast reported.
Meanwhile, Comcast plans to spend an extra $300 million this year on newly acquired NBCUniversal, mostly to pay for new primetime shows in a turnaround effort at broadcaster NBC.
NBCUniversal CEO Steve Burke disclosed the figure on a conference call with analysts Wednesday, the AP reported. But Burke said the turnaround of the fourth-ranked network will take several years.
On the same call, CFO Michael Angelakis said Comcast has yet to make a decision on whether it wants to buy the other half of the Universal Theme Park from Blackstone Group, its partner in that venture. The company reported that fortunes at the park increased, largely on the strength of the new Harry Potter attractions.