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Comcast first-quarter profit more than triples

/ Source: The Associated Press

Comcast Corp., the nation’s largest cable TV operator, said Thursday its net income for the first quarter more than tripled, buoyed by strength across all its business lines including once-lagging digital voice.

The Philadelphia-based company earned $466 million, or 22 cents a share, in the latest quarter, compared with $143 million, or 6 cents per share, in the same period a year ago. The most recent quarter also got a boost from an investment gain of $64 million.

Operating income soared by 21 percent to $1.05 billion in the quarter while revenue rose by 10 percent to $5.9 billion from the prior year.

“Let me be corny and say, this was a Comcastic quarter,” said Brian Roberts, chairman and chief executive of Comcast, borrowing a catch phrase from the company’s ad slogans. “I can’t imagine a stronger start to this year,” Roberts said during a conference call with analysts.

Analysts surveyed by Thomson Financial on average expected earnings of 14 cents per share on revenue of $5.83 billion. That estimate includes expenses for stock options, which Comcast and all other public companies are now required to include in their net income calculations.

Comcast added 47,000 customers that subscribe to at least basic cable, compared to a decline of 29,000 in the first quarter of 2005. The monthly revenue per subscriber across all lines of business was $86.75, up from $79 last year.

“There’s an acceleration in the core video business. That’s what drove the quarter,” said Philip Remek, media analyst at Guzman & Co. in Coral Gables, Fla. “Comcast has been losing basic subscribers and in the last couple of quarters that’s turned around.”

Comcast added 340,000 new digital-cable subscribers for a total of 10.1 million. Digital cable penetration as a percentage of all video subscribers rose to 47 percent from 41 percent a year ago.

Overall, the number of basic subscribers was about flat year-over-year at 21.5 million.

As for high-speed Internet, Comcast collected revenue of $1.1 billion in the quarter, up 22 percent from a year ago.

The company added 437,000 net new Internet subscribers, up from 414,000 a year earlier.

Comcast had 9 million Internet subscribers at the end of the quarter, keeping its position as the country’s largest provider of broadband.

In the quarter, Comcast’s digital voice business gained traction. The company added 211,000 net new subscribers — exceeding the total for all of 2005.

The company started rolling out digital voice over Internet service, or VoIP, last year, moving customers over from an earlier analog service. It sped up the rollout toward the end of the year, and now has digital service available to 19 million homes. By year’s end, Comcast expects to cover 32 million homes.

Overall voice revenue — digital and traditional calls — rose 9 percent to $191 million from a year ago, driven by digital.

“After many quarters of frustration at its VoIP deployment pace, it appears that Comcast is finally in the thick of its VoIP ramp-up,” Craig Moffett, an analyst at Sanford Bernstein, wrote in a report Thursday. “Investors are particularly likely to be pleased.”

Cable companies are aggressively courting customers for telephone service, wooing them away from phone companies by bundling phone and TV service. The phone companies are answering by building out their own ability to send TV over broadband lines.

Comcast also said it bought back 27 million shares in the quarter. The remaining amount authorized for buybacks stands at $4.6 billion.

The company reaffirmed its 2006 outlook, with cable and consolidated revenue expected to grow by 9 percent to 10 percent, consolidated operating cash flow to rise by 9 percent to 10 percent.

Comcast expects to close its acquisition of Adelphia Communications Corp. by the end of July.

The cable operator and Time Warner Inc. agreed last year to acquire the bankrupt cable operator in a $17.6 billion cash-and-stock deal. Adelphia declared bankruptcy in 2002 after disclosing $2.3 billion in off-balance-sheet debt.

Remek said the hope was for the transaction to close in the second quarter. He added that delays aren’t good because Adelphia has been losing subscribers as it languishes in bankruptcy court, eroding the company’s value as an acquisition.