Comcast Corp. will make video cash-flow growth and basic-subscriber growth
its top priorities after its proposed merger with AT&T Broadband is
completed, which is expected sometime in November, company officials told
In Comcast's third-quarter conference call with analysts, cable-division
president Steve Burke said driving video -- not telephony -- cash-flow growth
and basic subscribers will be the immediate goals of a combined AT&T Comcast
Burke said that after creating a new operational structure for the combined
company in August -- into six regional divisions -- he asked each divisional
head to create a preliminary operational plan.
During September, Burke and his senior management visited each of those
divisions and revised those plans, resulting in new priorities for each of its
16 markets. 'The goal was to have a comprehensive business plan vetted before
the close [of the merger],' he said.
Among those new priorities are leveraging Comcast's structure and people;
increasing revenue by repackaging and remarketing digital offerings; and
'right-sizing' staffing in the field.
'We have a very clear sense of what we have to do,' Burke said.
He added that he was impressed by the way Comcast employees were able to
focus on AT&T Broadband integration issues without losing sight of improving
results at the existing Comcast operations.
Comcast's third-quarter results backed up that praise, with operating cash
flow increasing 17.8 percent in the period to $826 million and revenue rising
12.7 percent to $2.7 billion.
The MSO lost about 2,500 basic subscribers in the period, compared with a
loss of 10,500 customers in the second quarter. So far this year, basic
subscribers have risen about 0.7 percent to 8.5 million customers.
Digital-cable subscribers increased by 205,000 in the period to 2.1 million.
Digital penetration increased to 24.9 percent in the period from 19.4 percent in
High-speed-data customers were up by nearly 170,000 to 1.3 million, with
penetration rising almost three percentage points to 11 percent of marketable
At the cable division, revenue was up 12.3 percent to $1.55 billion and cash
flow rose 12.2 percent to $645 million.
Free cash flow -- or cash flow once interest and capital expenditures are
made -- was $262 million in the period. Comcast said that in the first nine
months of the year, the MSO has generated $660 million in free cash flow.
The company also reported net income of $75.6 million, or 8 cents per share,
compared with a loss of $106.8 million (11 cents) in the same period last
Executive vice president and treasurer John Alchin said the company is on
track to meet its guidance of 12 percent to 14 percent revenue and cash-flow
growth for the full year.
Comcast stock rose 33 cents per share, or 1.36 percent, closing Monday at $24.68.