Comcast Corp. stock was hammered Thursday despite the MSO reporting its best
quarterly operating cash flow in five years, fueled by strong growth in
digital-cable and high-speed-data subscribers.
Revenue at the cable unit was up 12 percent in the second quarter to $1.5
billion and operating cash flow rose 15.3 percent to $653 million. In a
conference call with analysts, president Brian Roberts said the quarterly cash
flow increase was the company's best in five years.
And still, Comcast stock plunged nearly 9 percent, down $1.79 per share to
close at $19.11.
During the conference call, executive vice president and treasurer John
Alchin said the cable unit contributed 75 percent of the free cash flow in the
Digital growth was strong in the quarter, with subscribers rising by 198,000
to 2.7 million. The strong growth spurred Comcast to increase its guidance for
digital growth for the year to between 700,000 and 800,000 subscribers, instead
of the previously expected 600,000 to 700,000.
High-speed-data revenue nearly doubled in the quarter compared with last year
to $139.6 million from $69.3 million. High-speed-data subscribers rose 12.3
percent (128,000 customers) over the first quarter of this year to 1.17
Roberts said the pending merger with AT&T Broadband is on track to be
completed in the fourth quarter. However, he declined to be specific regarding
reports that AT&T Corp. and AOL Time Warner Inc. were close to unwinding
their Time Warner Entertainment partnership.