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Comcast Corp. Reports Smaller 4Q Loss

Posted on: Thursday, 27 February 2003, 06:00 CST

Comcast Corp. Reports Smaller 4Q Loss

source: Associated Press Tech News

By MICHAEL RUBINKAM, Associated Press Writer

PHILADELPHIA - Comcast Corp. reported a smaller fourth-quarter loss Thursday and said it has stopped the hemorrhaging at the cable division it acquired three months ago from AT&T. The company also belatedly announced 3,400 job cuts that took place in January.

The nation's largest cable operator said its outlook for 2003 was improving — in large part because the division formerly known as AT&T Broadband is no longer losing cable subscribers.

"It was critical to stop or stem the loss of basic customers," Brian L. Roberts, president and CEO of Comcast Corp., said in a conference call. "There was an alarming trend and it needed to be dealt with."

For the three months ending Dec. 31, the company had a loss of $51 million, or 3 cents per share, compared to a loss of $321 million, or 34 cents a share, for the same quarter the year before.

Analysts surveyed by Thomson First Call had predicted a quarterly loss of 12 cents per share. But Thomson said the consensus was for a loss of 5 cents a share if the estimates were adjusted for investment and other expenses included in Comcast's reported results.

Fourth quarter revenues totaled $4.37 billion, a 53 percent increase from the $2.86 billion reported in the same period last year.

Comcast was upbeat about the rest of 2003, saying its cable division should deliver earnings before interest, taxes, depreciation and amortization of about $6.25 billion, a substantial improvement over the $4.9 billion generated in 2002 after costs related to the AT&T deal were excluded.

Wall Street appeared cheered by the news. In trading on the Nasdaq Stock Market, Comcast shares closed up $1.87, or 7.1 percent, at $28.37.

Comcast also said it cut the 3,400 jobs, or almost 10 percent of its work force. Those reductions, along with the elimination of 1,700 positions at AT&T Broadband's headquarters in Englewood, Colo., late last year, are expected to save Comcast about $500 million in 2003.

Comcast completed the acquisition of AT&T Broadband in November for about $29 billion in stock to become the nation's largest cable operator. Comcast now has more than 22 million cable TV customers in 17 of the 20 largest cities.

Following the close of the deal, Comcast launched several initiatives to help reverse mounting subscriber losses at AT&T, including local promotions, an aggressive sales push and an effort to win back satellite subscribers.

While Comcast gained 68,000 subscribers in 2002, AT&T lost 481,000. In the first three months of combined operations, Comcast lost only 7,900 subscribers.

It is crucial to the success of the acquisition that Comcast control subscriber losses in the AT&T division, said Mark Zadell, a cable analyst at Blaylock & Partners. While it's still too early to tell whether Comcast made the right move, Zadell said, he likes what he sees so far.

For all of 2002, Comcast lost of $274 million, or 25 cents per share, compared to a profit of $609 million, or 63 cents per share, in 2001. Revenues were $12.46 billion, a 27 percent increase from the $9.84 billion reported in 2001.

The company anticipates $4 billion in capital expenditures this year. Over the next two years, Comcast said it will rebuild about 67,000 miles of cable previously owned by AT&T Broadband, two-thirds of which will be completed in 2003. Almost all of the new cable will accommodate two-way digital and high-speed Internet services.

Comcast's other businesses include E! Networks, Comcast-Spectacor, The Golf Channel and Outdoor Life Network.

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On the Net:

http://www.comcast.com

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