Comcast Sees Boost In 3Q Revs
The weakening economy hasn't affected Comcast Corp yet--but the fragile TV advertising market is starting to. Comcast's overall third-quarter results rocketed up 38% to $771 million versus $560 million in the period before. Quarterly revenues grew 10% as well, to $8.6 billion from $7.8 billion. Equity analysts have been expecting on average $8.56 billion.
The company said revenue from Comcast's cable subscription business rose 7% to $8.1 billion, with video revenue climbing 4% to $4.7 billion. High-speed Internet revenue rose 9% to $1.8 billion, as the company added 382,000 customers in the quarter.
But Comcast's local cable advertising--albeit a much smaller piece of the overall revenue picture--saw revenues fall 10% to $374 million, reflecting weakness related to the economic slowdown.
The company's programming networks--including Versus, E, Style, Golf Channel, G4 and AZN Television--saw revenue rise 5% to $347 million. Typically, 55% of many cable networks get their revenues from subscription fees, with the other 45% coming from advertising.
Comcast has made an effort to grow its business by having consumers buy into its triple play of services: video, Internet and phone. But in recent months, Comcast has noticed that customers are less inclined to add more services.
"It's not that people who have our service are leaving," Steve Burke, Comcast's COO, told analysts on a conference call. "[What we see] is that there's less propensity to upgrade." He says this is especially true for new customers.
Digital cable added 417,000 customers in the third quarter--less than the 503,000 added in the same period in 2007. Comcast said that 483,000 digital-telephone subscribers signed up during the quarter, with digital-telephone revenue improving 44% to $690 million.
Comcast said its basic cable business at its systems continues to decline, with the company losing 147,000 in the latest three months. Analysts were expecting a much smaller dropoff.
Comcast's stock was down 8% to $15.66 on midday trading on Wednesday, a day after its shares soared nearly 25% to $16.96--part of a massive, nearly 900-point surge in the Dow Jones Industrial Average and the anticipation of strong third-quarter earnings.
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