Comcast Gets 2Q Bounce

The biggest cable system operator, Comcast Corp., is making some gains against its telco competitors, which resulted in strong investor interest in the company on Wednesday.

Its second-quarter earnings results lifted the cable system's share price by 5% in midday trading to just under $20 a share--all this despite missing out on financial analysts' earning estimates.

Comcast's earnings were at $632 million or 21 cents a share, up from $588 million in the second quarter of 2007. Analysts were expecting 23 cents a share. Revenue climbed to $8.55 billion versus the $7.71 billion of a year ago.

One major focus was Comcast's continued positive results in the industry's so-called triple play: video, broadband and phone service. One key area comes at the expense of the telcos: Comcast said 555,000 new digital-telephone subscribers signed up during the quarter, with revenue jumping 50% to $640 million.

In addition, the company noted that high-speed Internet revenue rose 10% to $1.8 billion. Comcast added 278,000 new Internet customers in the quarter. The company said revenue from its cable business rose 7% to $8.1 billion, with video revenue increasing 3% to $4.7 billion.

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Investors seemed to shrug off news from Comcast's digital cable subscribers. Comcast added 320,000 customers in the second quarter, far below the 823,000 it added in the second quarter of 2007. Digital now accounts for 67% of customers, or 16.3 million subscribers. Average revenue per cable subscriber rose 9% to $110 in the second quarter.

Comcast's strong investor interest was also the result of lower-than-expected video subscriber growth from competitors' new video services provided by Verizon Communications and AT&T.

The company's cable networks--which include Versus, E!, Style, Golf Channel, G4 and AZN Television--saw revenue rise 10% to $366 million. At the company's local cable systems, advertising revenue slipped 2% to $399 million in the second quarter.

Comcast will soon kick off a major marketing campaign timed to the changeover from analog to digital signals next February. The switch is estimated to give the company an additional 1 million to 2 million new customers.

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