The nation's largest cable company, Comcast, beat analysts' profit forecasts for the first quarter, adding more than 1 million new customers and continuing to expand its free cash flow, despite its ongoing battle to push through its much-maligned merger efforts with NBC Universal and earning the dubious honor of being newly minted as the "Worst Company in America," by the Consumerist website.
The company said net income was $866 million, up 12 percent from $722 million in the year-ago quarter, and revenue was up 3.8 percent to $9.2 billion; cable business revenue was up 3.5 percent to $8.7 billion, and ad revenue-led by automotive spending-was up 24 percent to $360 million.
Comcast continued a trend dating back to 1Q08, gradually losing video customers and video penetration of homes passed, while gaining digital video customers. The company saw 82,000 video customers drop service in the quarter, compared with a loss of 78,000 in 1Q09. But, the company said average monthly revenue per video customer rose 6.3 percent to $122.98. The company also saw a 7 percent increase in high-speed Internet customers and in voice customers. Net customer additions for the quarter was 1.02 million.
"Our healthy operating and financial results for the first quarter mark a solid start to 2010. First quarter results were driven by robust customer growth, a rebound in advertising, momentum in Business Services and our continued focus on expense and capital management," said Chairman and CEO Brian Roberts. "We've also made significant progress in deploying All-Digital and DOCSIS 3.0, or wideband. These are strategic initiatives that will further enhance our superior products, strengthen our competitive position and build long term value for our shareholders."
At least one analyst, who forecast a customer add of just 800,000, said Comcast's efforts to make more online video available to customers through its Xfinity offering was helping to retain its customer base.
"Comcast is promoting things like online cable-TV viewing to help deter against cable-cord cutting," analyst Todd Rethemeier at Hudson Square Research told Bloomberg. "Verizon is no doubt slowing down their build, so that's a positive for the cable companies."
As for it's "Worst" ranking, Comcast rolled by its nearest competition, Ticketmaster, by a 59 to 41 percent vote on the Consumerist website's poll. For it's effort, it will be awarded the "Golden Poo" statuette.
- see this release
- see this Wall Street Journal article
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