Comcast 4Q profit up on revenue boost, tax gain
PHILADELPHIA - February 3, 2010 -- Higher revenue and a tax gain helped propel Comcast Corp.'s fourth-quarter earnings sharply higher, as the nation's largest cable operator solidified its position as the biggest U.S. Internet service provider as well.
The company, poised to become one of the largest media conglomerates in the nation if its purchase of a 51 percent stake in NBC Universal goes through, has trumped AT&T in wired broadband customers for a second quarter in a row, with 15.9 million customers.
Strength in Comcast's Internet business, and a smaller loss in video customers than a year ago, offset softness in its phone business to boost revenue by 2.9 percent in the quarter.
Comcast said Wednesday it earned $955 million, or 33 cents per share, in the fourth quarter, more than double the $412 million, or 14 cents per share, earned in the year-earlier period.
Excluding the tax gain, Comcast would have earned 29 cents per share. Last year's quarter had a $600 million charge related to the writedown of its investment in Clearwire Corp., a provider of mobile Internet services that the cable operator uses as its wireless broadband service.
Revenue rose to $9.06 billion from $8.81 billion. Both earnings and revenue exceeded the forecasts of analysts, who expected 27 cents per share and revenue of $8.96 billion, according to Thomson Reuters. Those estimates typically exclude one-time items.
Free cash flow came to $768 million, down 11 percent from the year-earlier quarter.
In the quarter, Comcast added 290,000 net subscribers in its core businesses of video, Internet and phone, the same as the 2008 quarter.
But the total masked weakness in video that was offset by increases in Internet and phone subscriptions.
The Philadelphia company lost 199,000 basic video subscribers, smaller than last year's 233,000 loss. It added 410,000 digital TV customers, up 66 percent. Digital cable TV service is added on top of the basic video service and isn't a separate group of subscribers.
On average, people paid $67.45 per month for video, up 2 percent.
Comcast added 247,000 Internet subscribers, or 34 percent more, and they paid on average $41.95 for the service. About 243,000 new phone customers signed up in the quarter, but that's down from 344,000. Phone subscribers on average paid $37.98 a month, down from the year before, reflecting stiff competition from phone companies and a shift to cell phones.
Video revenue fell slightly to $4.79 billion but Internet and phone revenue rose.
For the year, Comcast earned $3.64 billion, or $1.26 per share, compared with $2.55 billion, or 86 cents per share, a year earlier. Revenue rose by 3.9 percent to $35.76 billion.
In premarket trading, Comcast shares were up 4 cents to $16.33.
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