Strong 2006 Finish for Comcast

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Comcast reported yet another strong quarter Thursday morning, with revenue and operating cash flow up 14% and 17%, respectively, overall in the fourth quarter, driven mainly by the success of the MSO’s triple-play bundle.

Basic customers rose by 110,000 during the period -- the highest quarterly growth in the company’s history -- and digital-cable and high-speed-data subscribers rose by 613,000 and 487,000, respectively. Comcast also added 508,000 digital-telephone customers (421,000 net additions when losses of 87,000 circuit-switched phone customers are taken into account), ending the year with 1.55 million phone subscribers.

“2006 really was a watershed year for Comcast,” chairman and CEO Brian Roberts said on a conference call with analysts. “Simply put, it may have been our best year ever -- outstanding execution across all business lines with strong momentum taking us into 2007.”

Comcast also issued guidance for the full year, projecting 2007 revenue and operating cash flow growth of at least 12% and at least 14%, respectively. And the operator projected that it would add 2.6 million digital-voice customers in 2007, up from the 1.5 million it added in 2006.

Putting a bit of a damper on the strong results was a projected increase in capital expenditures for 2007.

Comcast said capex for 2007 would rise by more than $1 billion to $5.7 billion from $4.6 billion in 2006, mainly to fund strong revenue-generating-unit growth, including an expanded voice rollout. The MSO added that it marketed digital phone to 27 million homes in 2006, and that number will increase to 37 million in 2007.

In a research report, Sanford C. Bernstein cable analyst Craig Moffett wrote that Comcast’s explanation for the increased capex would “provide some, but not much, comfort for investors.”

Comcast shares were down $1.45 each (4.4%) to $42.41 in early trading Thursday.

The company also declared a 3-for-2 stock split, in the form of a 50% dividend payable Feb. 21 to shareholders of record Feb. 14. The stock dividend will be an additional 0.5 share for every share held.

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