Comcast Posts Modest Cable Gains


Comcast Corp. posted modest gains in cable subscribers and
cash flow during the first quarter, although strength at its QVC unit lifted its overall

Comcast's consolidated operating cash flow rose 16.4
percent, to $388.3 million from $333.7 million in the same period a year ago. Revenue rose
20.3 percent, to $1.36 billion from $1.31 billion. Pro forma cash flow -- as if
Comcast's E! Entertainment Television and Comcast-Spectacor sports operations were
part of last year's results -- would have risen 12.1 percent, and revenue would have
gone up 10.6 percent.

In the core domestic cable operations, revenue grew 8
percent, to $541.2 million from $501.1 million, and cash flow rose 8.3 percent, to $249.4
million from $230.3 million. Costs associated with building regional call centers and
deploying new services dragged down cash flow, the company said.

High-speed-data service Comcast @Home has grown to about
20,000 subscribers, up from 16,800 at the end of the first quarter.

The cable unit added 23,100 basic subscribers, a 1.8
percent rate over the last 12 months.

Comcast's stock price dipped on the news. One analyst
cited indications that shopping channel QVC's growth was slowing. Another had figured
that Comcast's cash flow would hit double digits, instead of the 8.3 percent that it
actually reached.

Comcast officials said they were pleased with the results,
though. On QVC, while cash flow going forward won't match its 20 percent
first-quarter rise, the unit is on target for double-digit 1998 growth, treasurer John
Alchin said.

Jay Nelson, a cable analyst with Brown Bros. Harriman, said
he was only mildly disappointed by less-than-double-digit cable-cash-flow growth.
Longer-term, he said, "if the Microsoft [Corp.] connection means anything,
you've got to like that combination of Microsoft and QVC." Microsoft invested $1
billion in Comcast last year, and QVC's Internet venture is off to a solid start,
Nelson noted.

QVC's revenue grew 13.5 percent, to $544.6 million
from $479.7 million in the first quarter of 1997, and cash flow rose to $95.2 million from
$79.1 million.

Comcast's cellular business showed just a 1.2 percent
revenue rise, to $105.4 million from $104.1 million a year ago, while operating cash flow
rose 4.8 percent, to $39.5 million from $37.7 million.

The overall company's net loss rose to $86 million (24
cents per share) from $65 million (20 cents) a year ago, due to rising losses from shares
of affiliates, notably Sprint PCS. Comcast's quarterly loss from affiliates grew to
$129.7 million from $70.1 million, and $84.7 million of that loss came from Sprint PCS.

In other earnings reports last week:

• Jones Intercable Inc., of Englewood, Colo., reported
22 percent cash-flow growth, to $46 million in the first quarter, versus $37.9 million a
year ago. That translates into a 10 percent bump on a pro forma basis, excluding system
acquisitions. The company's revenue grew 21 percent, to $101.3 million from $83.5
million, because of system acquisitions in North Prince Georges County and Annapolis, Md.;
Manitowoc, Wis.; and Independence, Mo. Jones also sold a system in Walnut Valley, Calif.,
and its management fees declined because of the sale of systems owned by managed

Jones added 6,682 basic subscribers in company-owned
systems, a 3.5 percent annual rate. At the end of the quarter, Jones owned some 95 percent
of total subscribers, compared with 23 percent three years ago, as a result of the
MSO's rolling up of systems owned by limited partnerships. The company's
quarterly net loss rose to $20.7 million, or 51 cents per share of stock, from $15.8
million (50 cents) a year ago.

• Cablevision Systems Corp., of Woodbury, N.Y., said
its adjusted operating cash flow rose 44.7 percent in the quarter, to $176.7 million from
$122.1 million, although the pro forma rise was 13.4 percent. Net revenue rose 88.5
percent, or a pro forma 17.2 percent.

Its net loss declined to $27.2 million, or 47 cents per
share, from $111.9 million ($2.25) a year ago. Recurring average monthly revenue per
subscriber rose to $41.65 in March, versus $37.45 a year ago. Internally, the company
added 27,000 subscribers in the quarter, and its internal growth rate for the past year
was 2.7 percent.

Cablevision had previously released results for its cable
operations and commercial telephone business on Long Island, N.Y. The pro forma
adjustments covered a range of transactions, including acquisitions of more of Madison
Square Garden L.P., along with Radio City Productions Inc. and 10 cable systems from
Tele-Communications Inc., for stock and assumed debt.

• Falcon Holding Group L.P.'s quarterly cash flow
fell 3.5 percent, to $33.3 million from $34.5 million in the same period a year ago, while
revenue rose less than 1 percent, to $64.6 million from $64 million. Falcon blamed rising
programming and marketing costs for the cash-flow decline. The net loss of the Los
Angeles-based parent of Falcon Cable TV Corp. rose to $18.9 million from $15.3 million in
the first quarter of 1997.

• RCN Corp., the start-up cable operator and
competitive local-exchange carrier based in Princeton, N.J., said its quarterly loss rose
to $67.7 million from $17.1 million in the fourth quarter of 1997, although $44.7 million
of the loss was a one-time charge related to its Erol's Internet Inc. and UltraNet
Communications Inc. acquisitions.

RCN's pro forma revenue rose 21.4 percent, to $43
million from $35.4 million in the preceding quarter, as the company's customer base
rose to 660,000. In the quarter, RCN generated $9.6 million in negative cash flow,
compared with an $8.6 million cash-flow loss during the previous quarter.