• by Wayne Friedman , May 2, 2008

Comcast Corp. first-quarter profit took a tumble--down 12.5% to $732 million. But Wall Street investors paid that no attention.­­­

The shocker was that its broadband business came in way over estimates--by about 50%, gaining 492,000 subscribers and growing its Internet revenue by 12% to $1.8 billion. That alone pushed up its stock by 6% in mid-day trading to over $21, according to analysts.

The market expected Comcast's basic-cable customers to show declines--and they did, losing 57,000 in the latest three months.

But Comcast chairman Brian Roberts said during the earnings call that the combination of video, broadband and phone service--the so-called "triple-play" bundle--is working. He noted that the average revenue per-customer has risen to $107 from $96 over the past year.

Overall, Comcast Cable revenue rose 10% to $7.9 billion, with video revenue climbing 5% to $4.7 billion.

Comcast now says customers with Internet services have reached 28% penetration of all of the company's customers--14.1 million customers. The third leg of the triple-play package--phone service--also showed major gains. Phone revenue climbed 65% to $587 million in the first quarter of 2008, from $356 million in 2007. Comcast added 639,000 customers for its Comcast Digital Voice (CDV) service.

Local ad revenue increased 6% to $344 million in the first quarter of 2008, from $322 million in 2007--due primarily to one additional week in the broadcast advertising calendar and an increase in political advertising.

Comcast's cable networks--E! Entertainment Television and Style Network, The Golf Channel, Versus, and G4--posted $363 million in distribution and advertising revenue, a 20% improvement over the same period in 2007.

Although its endemic business is changing--that of its basic cable subscribers--Comcast is content with its new direction.

Comcast COO Steve Burke said during the earnings call: "If we lose 57,000 basic subscribers and gain 630,000 phone subscribers or 490,000 high-speed data subscribers, that is a pretty good tradeoff."