Comcast reported a strong first quarter Thursday, tallying a 12% bump in revenue to $7 billion and a 14% increase in cash flow to $2.8 billion, driven by 571,000 voice additions.
Analysts were paying particularly close attention to Comcast’s voice additions -- estimates had ranged from 550,000-600,000 new additions for the period, and the Philadelphia-based cable operator fell smack in the middle of that range.
Comcast also showed strong performance in other subscriber metrics -- it added 75,000 basic subscribers, 563,000 high-speed-Internet customers and 644,000 digital-cable subscribers.
In total, Comcast added 1.8 million revenue-generating units (a combination of basic, high-speed-Internet, phone and digital-cable subscribers) in the period, its best-ever quarter for RGU growth.
Perhaps equally as important to Wall Street, capital expenditures were on target at $1.4 billion in the period and appear to be pacing along with company guidance of $5.7 billion in capital expenditures for the full year.
“Triple-play is really changing the company and it’s the gift that keeps on giving,” Comcast chairman and CEO Brian Roberts said on a conference call with analysts.
Comcast also reaffirmed its guidance of at least 12% revenue growth, at least 14% cash-flow growth and 6.5 million net RGU additions for the full year.
Chief operating officer Steve Burke said on the conference call that Comcast’s efforts to roll out digital boxes ahead of the Federal Communications Commission’s July 1 ban on set-tops with integrated security functions was one of the drivers of the increased digital penetration.
“As a result, you’re seeing in the first quarter us being more aggressive than we normally would be to get more boxes out before July 1,” Burke said. “In the second quarter, you’re going to see that spike even more. We’re going to have a very, very high digital number in the second quarter, which we think actually is going to drop in the third quarter after we’ve made the transition to the new boxes.”
Of the digital additions -- a record for Comcast -- about 307,000 were for enhanced digital, Comcast’s low-end digital tier, he added.
He added that the Chicago conversion is going “easier than we thought,” mainly because the operator has done it before in parts of its Augusta, Ga., market.
“Our general approach to the eventual conversion -- which we think is inevitable -- to all-digital is that there is no great rush and there’s no need to put too much stress, financially or otherwise, on the system,” Burke said. “If we get up over 60% by the end of this year -- which we should do fairly easily -- and we keep at this pace, what you’re going to find is that we have many, many systems that are 70% and 80% digital and will be able to make the transition. But we want to do it gradually; we have a lot of other things going on with the triple play. We don’t need the bandwidth just yet. Our strategy of chipping away at it makes sense.”
Comcast shares were down 71 cents each (2.5%) to $27.38 per share in early trading Thursday.