Comcast Posts Solid Q2

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Comcast continued to chip away at basic-subscriber
losses in the second quarter, reporting
another period of improved results while driving
revenue and operating cash-flow growth in line with analysts’
expectations.

Comcast and other cable
operators showed a renewed
interest in paring basic subscriber
losses in the first quarter,
when the top MSO in the
country cut its basic losses in
half, from 82,000 subscribers
to 39,000.

While the second-quarter
loss wasn’t as bad — at 238,000,
compared to 265,000 in the
same period last year — the
shortfall was still a sore point.
The results were shy of analysts’
consensus estimates,
which predicted losses would
be around 173,000 during the
seasonally weak period when
customers traditionally disconnect
service as they move
to summer residences.

Despite that miss, Sanford
Bernstein cable and satellite
analyst Craig Moffett said that
given lowered expectations after
Time Warner Cable’s results
in the previous week — where
the No. 2 operator lost 128,000
basic customers, more than the
111,000 it lost in the prior year
— Comcast’s performance was good enough.

“Comcast’s results won’t end the bull/bear debate, but
against these unmistakably lowered expectations, they
are likely more than enough for a sigh of relief,” Moffett
wrote in a research report.

On a conference call with analysts, Comcast Cable
president Neil Smit said the subscriber performance
was driven mainly by improvements in customer retention,
which has been aided
by gains in customer service.
Smit added that repeat service
calls improved by 15% in
the period, and repair phone
calls were better by 9%. The
goal is to reduce servicerelated
truck rolls by 2 million
and service-related phone
calls by 10 million by the end
of the year compared to 2009,
he said.

“That equates to real savings.
That’s taking unnecessary
noise out of the system,”
Smit said on the call.

High-speed Internet
growth continued to improve
during the period — Comcast
added 144,000 HSI customers
in the period compared
to 118,000 in the same period
last year. But voice customer
growth continued to lag:
the MSO added 193,000 telephone
customers in the quarter
vs. 230,000 last year.

The Internet gains, coupled
with a strong showing in commercial
services — revenue
increased 41.7% in the period
— helped drive cable-systems revenue up 5.6%, to $9.3
billion, and operating cash flow up 6.8%, to $3.9 billion
in the period.

Overall, consolidated pro
forma revenue was up 9.4%,
to $14.3 billion, and operating
cash flow rose 6.7%, to $4.8
billion, driven by the cable results
and strong performance
at Comcast’s NBCUniversal
joint venture.

At NBCU, cable networks
revenue rose 12.6% to $2.2 billion,
and operating cash flow
rose 1.1%.

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