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Comcast staunches flow of basic video losses in Q2; broadband flourishes

Wed, 08/01/2012 - 3:01pm
Mike Robuck

For the seventh consecutive quarter, Comcast has reduced the rate of its basic video subscriber losses, while overall second-quarter net profit increased 32 percent, thanks in part to new broadband subscribers.

Comcast, the nation’s largest cable operator and ISP, lost 176,000 video subscribers in the second quarter, compared to 238,000 customers that left in the same quarter a year ago. Despite over-the-top competition and discounted pricing by competitors, Comcast has continued to stem the tide of its basic video losses and may, at some point, add subscribers in an upcoming quarter, but the second-quarter subscriber numbers are typically down due to college students disconnecting their services over the summer.

Analysts had projected that Comcast would lose 200,000 basic video subscribers.

The trend of adding broadband subscribers continued in the quarter for Comcast with 156,000 new customers, which was an 8.4 percent improvement. Comcast added 158,000 voice customers in the quarter, which was off of last year’s 193,000 additions.

As of June 30, Comcast’s triple-play customers totaled 50.5 million, an increase of 1.4 million or 3 percent over last year's second quarter.

For the second quarter of 2012, cable revenue increased 6 percent to $9.9 billion compared to $9.3 billion in the second quarter of last year.

The increase was driven by a 9 percent increase in broadband revenue, a 34 percent increase in business services revenue and a 3 percent increase in video revenue. On the advertising front, Comcast brought in $552 million, which was a 7.6 percent increase.

Monthly average total revenue per video customer increased 8 percent to $148.57, reflecting a growing number of residential customers taking multiple products, rate adjustments and a higher contribution from business services.

For the six months ended June 30, cable revenue increased 6 percent to $19.5 billion compared to $18.4 billion in 2011.

Comcast’s net profit for the quarter was $1.35 billion, or 50 cents per share, up from $1.02 billion, or 37 cents per share. Revenue for the quarter increased 6 percent to $15.2 billion. Analysts had projected Comcast would earn 48 cents per share on revenue of $15.2 billion, according to FactSet.

Comcast posted a 4.8 percent improvement in operating income and had free cash flow of $1.55 billion, which was a 2.2 percent increase.

NBCUniversal’s revenue dropped slightly to $5.5 billon, while operating cash flow fell 15 percent to $982 million.

"Our solid operating and financial results for the second quarter underscore the strength of our cable company and our focus on driving operational excellence and technology innovations,” Comcast Chairman and CEO Brian Roberts said. “We are improving the customer experience and delivering exceptional products, which are the foundation for cable's continued momentum in high-speed Internet and business services and stronger video and voice customer results.

“NBCUniversal's second-quarter performance came in as anticipated, and we continue to be very positive about our opportunities to build value across all the NBCUniversal businesses. Comcast Cable and NBCUniversal are also working well together to launch innovative products and experiences, and these efforts are being showcased now as we utilize all of our content and technology platforms to deliver the most comprehensive Olympics coverage ever."

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