Cable Operators

Comcast Sets Bar High

4/21/2006 8:00 PM Eastern

This Thursday, Comcast Corp. chairman and CEO Brian Roberts gets to put his money where his mouth is.

Roberts — who, along with other cable luminaries, touted basic and voice-services subscriber growth at the National Show in Atlanta earlier this month — will be the first cable operator out of the blocks to report first-quarter earnings on April 27, and expectations are high.

In a research report last Monday, UBS cable debt and equity analyst Aryeh Bourkoff raised his basic subscriber-growth estimate for the No. 1 cable operator in the country from 5,000 basic additions in the first quarter to 45,000 additions. Bourkoff estimated that Comcast will report flat basic subscriber growth for the full year, compared to a loss of 112,000 basic customers in 2005.

Bourkoff wrote those changes were due mainly to upbeat presentations by major MSOs at the National Show.

“Note that during the recent NCTA conference, Brian Roberts stated that he has never felt stronger that the business is poised to enjoy sustainable double-digit growth across all metrics,” Bourkoff wrote.

Bourkoff expects Time Warner Cable to report 40,000 basic-subscriber additions in the first quarter, up from the 34,000 additions the No. 2 cable operator reported in the fourth quarter and 26,000 additions in the first quarter of last year.

Basic Subscriber Forecasts
Estimates and actual results of net basic subscriber additions (losses).
Operator 1Q ’06 4Q ’05 1Q ’05
Time Warner Cable40,00034,00026,000
Cable Net Adds105,800(-91,800)(-41,900)
Source: UBS estimates and company reports; 2006 numbers are estimates.

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