Comcast Reports Larger Than Expected First Quarter Profits
Shares of Comcast Corp, the largest cable company in the US, increased by six percent during the first three months of 2009 as the company signed on a considerable amount of new subscribers to its digital services.
The company earned $772 million, or 27 cents per share in the first quarter of 2009, compared to $732 million, or 24 cents per share in the same period from 2008. Revenue increased 5.3 percent to $8.84 billion. Average revenue per customer was $115.27 per month, representing an increase of 8 percent.
The 27-cents-per-share earnings beat out the Thomson Reuters-compiled estimates of 23-cents-per-share.
Comcast recruited 837,000 new customers, compared with the estimate of 660,000 compiled by Jonathan Atkin, a San Francisco-based analyst with RBC Capital Markets, according to Bloomberg.
Even more revealing of its overall performance on Wall Street, Comcast’s free cash flow jumped 95 percent to $1.37 billion, while capital expenditures fell 19 percent to $1.16 billion, according to the Wall Street Journal.
Comcast reported that while consumers tended to spend less on pay-per-view features, they didn’t notice a decrease in premium channel subscriptions. The Philadelphia-based company also attributed part of its increase to consumers who switched to cable in preparation for the analog TV shutdown in June.
Comcast reported 328,613 new high-speed Internet customers, with about two-thirds coming from slower DSL connections. Additionally, the company reported 298,433 new phone subscriptions.
Meanwhile, ad revenue remained down by 25 percent in the first quarter to $262 million.
On Wednesday, Time Warner Inc also reported a profit of higher than expected levels. First quarter revenue dropped 7 percent to $6.9 billion, but that was higher than the average Reuters Estimates of $6.75 billion.
Its shares increased 3 percent following its announced plans for an AOL spinoff.
The move was greatly embraced by analysts.
"The best solution, in our opinion, is to spin off AOL in a tax-free transaction, which should remove some of the negative overhang caused by AOL on Time Warner’s stock price," Martin Pyykkonen, analyst at Wunderlich Securities, told Reuters.
Time Warner said it also notified Google Inc of its intention to buy back its 5 percent stake in AOL, Reuters reported.
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