Data, Digital Boost Comcast in 1Q

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Strong high-speed-data and digital-cable additions helped to drive cash-flow growth to 17% in the first quarter at Comcast Corp., prompting the No. 1 MSO to increase its cash-flow guidance for the year.

Comcast reported revenue of $5.4 billion in the quarter (up 9%) and operating cash flow of $2 billion. Those numbers were fueled mainly by high-speed-data (414,000) and digital-subscriber additions (200,000) during the period.

Circuit-switched telephone customers declined by about 3,000 during the period, but they were offset by a gain of about 7,000 voice-over-Internet-protocol telephone subscribers. That was expected as Comcast moves toward rolling out VoIP this year.

In the next 30 days, Comcast plans to roll out VoIP in Boston and Hartford, Conn. That will expand in the next 60 days to Chicago and Portland, Ore.

Comcast also expects to take advantage of the 18 million-20 million homes in its footprint that are not video subscribers by offering a high-speed-data and telephone bundle for about $69 per month. The company did not say when it would begin offering that package, but it added that trials of the bundle in markets like Indianapolis are encouraging.

Basic-video subscribers declined by about 29,000 during the period, in line with expectations.

The gains moved Comcast to increase its full-year operating-cash-flow-growth guidance to 14%-15% from the 12% growth estimated earlier this year.

Comcast’s board of directors also approved a $2 billion increase to its stock-buyback program. The MSO bought back about $326 million of its stock during the first quarter and $1.6 billion in the past 15 months.

On a conference call with analysts, chief operating officer Steve Burke said that aside from the high-speed-data and digital-subscriber growth, results were spurred by increasing demand for HD-DVR (digital-video recorder) set-top boxes.

Burke said Comcast distributed about 428,000 HD and/or DVR set-tops during the first quarter, or about 200,000 more than it expected. Comcast charges $5-$9.95 per month for the service, representing an important revenue stream for the MSO.

“We look at this as a business that we should accelerate, not decelerate,” he added.

Comcast said it expected to increase capital expenditures for the year by $200 million-$300 million, much of which will be going toward buying more HD-DVR boxes.

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