Comcast Excels with Ex-AT&T Systems


In its first full quarter since acquiring AT&T Broadband in November,
Comcast Corp. lived up to its promises and then some, driving subscriber growth
and cash-flow margins at the former AT&T Broadband systems and increasing
subscriber-growth guidance for the whole company for the year.

"Getting out of the blocks fast, showing that we could turn the business,
that it was just cable, that it was manageable and that the integration is
exceeding almost every expectation we set for ourselves, I'm very proud,"
Comcast CEO Brian Roberts said in a conference call with analysts.

Comcast added 57,000 basic subscribers in the first quarter -- 42,000 in
former AT&T Broadband systems alone -- ending the period with 21.3 million

The growth in the AT&T Broadband systems was a surprise -- AT&T
Broadband had lost 180,000 customers in the first quarter last year and lost
50,000 in the fourth quarter.

Comcast Cable Communications Inc. president Steve Burke said on the
conference call that the MSO's focus on video customers instead of telephone,
changing sales commissions to concentrate on video additions, an aggressive
program to sell service to new home-builds, promoting Hispanic networks in areas
with large Hispanic populations and a dish-buy-back program were all factors in
the recovery.

"The turnaround was more rapid than we expected," Burke said. "We were
projecting internally to lose subscribers in the first quarter."

That subscriber growth also translated into improved cash-flow margins (cash
flow as a percentage of revenue) at the former AT&T Broadband systems to
28.9 percent from 22.6 percent in the fourth quarter. Overall cash-flow margins
were 33.6 percent.

The margin expansion at the former AT&T Broadband systems was mainly
driven by the significant reductions in personnel costs associated with the
removal of AT&T Broadband's former headquarters operations in Denver.

Overall, Comcast had a strong quarter. Revenue increased 10 percent to $5.52
billion and cash flow rose 22 percent to $1.6 billion.

Comcast increased its year-end subscriber guidance to between 75,000 and
100,000 additional customers, versus previous guidance that subscriber growth
would be flat.

The Philadelphia-based MSO also boosted year-end high-speed-data guidance to
1.6 million net additions from previous estimates of between 1.3 million and 1.4
million additions.

For the quarter, high-speed-data subscribers increased by 417,000, up from
367,000 customer additions in the fourth quarter.

Despite the strong results, Comcast stock was down 18 cents per share in
afternoon trading Thursday, to $28.77 each.