QVC, Digital Lift Comcast Results

Author:
Publish date:
Updated on

Surprising strength at QVC Inc. and accelerating digital-TV
deployments lifted Comcast Corp.'s third-quarter results, the company reported last
week.

Comcast's consolidated operating cash flow rose 15
percent, to $420.7 million from $365 million in the third quarter of 1997, while revenue
rose 12 percent, to $1.35 billion from $1.2 billion.

QVC, which is mostly owned by Comcast, led the way with a
36 percent rise in operating cash flow, to $103.8 million from $76.3 million, or about $10
million more than recent analyst forecasts. QVC's revenue rose 17 percent, to $573.9
million from $490.6 million.

Comcast treasurer John Alchin said QVC was "executing
better across the board," including cost-control efforts.

Cable-division revenue rose 9 percent, to $571.7 million
from $524.7 million on a pro forma basis, while cable cash flow rose 10 percent, to $277.2
million from $251.9 million. Those numbers were in line with forecasts.

Comcast, though, beat expectations by claiming more than
50,000 digital-cable subscribers -- up from 27,700 Sept. 30, and growing by about 4,000
per week. Since the company had originally targeted 50,000 digital customers by
year's end, it revised that number up to 70,000.

"We'll easily make [70,000], and we could
certainly exceed that," Alchin said.

Comcast offers digital service in seven markets.

Internal basic-subscriber growth was 1.3 percent, which was
a bit below the industry average.

The Cox@Home high-speed-data service ended the quarter with
35,700 customers and, as of last week, it had about 41,000. The service is now offered to
more than 1.5 million homes in six markets.

Comcast reported $706.6 million in quarterly net income, or
$1.91 per share of stock, versus a net loss of $62.2 million (18 cents per share) a year
ago. In the quarter, Comcast recorded a $1.1 billion pretax gain related to AT&T
Corp.'s purchase of Teleport Communications Group.

Comcast's cellular unit's cash flow declined by 8
percent, to $47.4 million from $51.4 million, as revenue rose about 1 percent. Comcast
said its customer-acquisition costs rose, as it added 10,800 subscribers in the quarter,
versus a net loss of 2,400 customers in the same period a year ago.

Comcast's stock rose on the news. Comcast's
"A" shares began the week at $44.75 and closed last Wednesday at $47.94 -- a
gain of 7 percent over that span.

Related