Copyright 2005 MarketWatch.com Inc., All Rights Reserved
February 1, 2005 Tuesday 8:54 AM
Comcast Communications, the nation's largest cable operator, is expected to report a lower fourth-quarter profit on higher revenue when it issues results Thursday.
Analysts expect Philadelphia-based Comcast to report a profit of 11 cents a share on revenue of $5.25 billion, according to a poll taken by Thomson First Call. In the prior-year period, the company earned 17 cents a share on $4.74 billion in revenue.
Comcast's results will be heavily scrutinized for evidence of the cable industry's ability to stave off vigorous competition from regional telephone companies and satellite providers.
On the company's quarterly conference call, analysts surely will have questions about Comcast's reported joint bid, with Time Warner Cable, for the assets of bankrupt cable operator Adelphia Communications. Representatives from all three companies declined comment Monday on the bid, which was said to be in the $15 billion range.
Analysts will also be seeking more details on Comcast's planned rollout of Internet-based telephone service, which could be a direct weapon against regional phone companies.
As Comcast is the foremost proponent of video-on-demand, particularly free VOD offerings, analysts may seek more clarity on usage patterns, and the extent to which VOD influences customers to keep digital service.
Video-on-demand stores movies and television programs on a server. That allows viewing any time, like DVDs, with fast-forward, rewind, pause, and other functions.
Bank of America Securities analyst Doug Shapiro expects Comcast to report the addition of 30,000 new basic cable subscribers for the quarter, up from just 9,000 in the third quarter. This would give the company about 21.5 million basic subscribers, in line with its forecasts.
The company added 139,000 new basic subscribers in the fourth quarter of 2003, thanks to its acquisition of AT&T Broadband.
Generally, cable operators have been losing market share to satellite firms in recent years, which has been reflected in moderate basic subscriber growth for cable players. Cable operators have turned to other products, such as broadband, video-on-demand and telephone service, to entice customers away from satellite or keep them from defecting.
Shapiro sees Comcast adding 425,000 high-speed Internet customers in the fourth quarter, for a total of 6.98 million. CIBC World Markets' Cannon Carr expects to see about 416,000 sign-ups.
Comcast should report about 300,000 new digital subscribers, for a total of 8.7 million, according to Shapiro. Carr's estimate is more modest, calling for 208,000 additions.
Comcast shares closed at $31.60 Tuesday, down 59 cents.