Comcast Reports Profit on Rise in Cable, Net Clients

Comcast Corp., the largest U.S. cable-television operator, beat analysts’ expectations Wednesday by reporting a $383-million profit in the fourth quarter on increased demand for its digital cable and high-speed Internet services.

Philadelphia-based Comcast reported its latest financial results just as it surprised Wall Street with a $51-billion bid to buy Walt Disney Co.

Comcast’s per-share profit of 17 cents contrasted with a net loss of $51 million, or 3 cents, in the same period in 2002.

Analysts had expected the company to earn about 3 cents a share in the recent quarter.

Revenue for the quarter was $4.74 billion, up from $3 billion a year earlier. The latest results were boosted by the addition of the AT&T; Broadband cable systems, which Comcast bought in the November 2002.

The company said its profit gains were driven by a double-digit increase in new cable subscribers and by even more dramatic gains in the number of lucrative high-speed Internet subscribers.

Also, “significant operating efficiencies in the acquired cable systems ... and the benefits of our increased size” helped boost profit, Comcast said.

For 2003, Comcast’s earnings were $3.24 billion, or $1.44 a share, boosted by a one-time gain of $3.3 billion for asset sales.

Revenue totaled $18.5 billion for the year.

The company said it had a net loss from continuing operations of $218 million for 2003, compared with a loss of $469 million in 2002.

Although most analysts remained bullish about the cable operator’s outlook and its integration of the troubled AT&T; Broadband systems, which it acquired more than a year ago for $25.5 billion, some were concerned about future growth, especially in the basic cable business.

“The company has delivered wonderfully, but I didn’t think it was a blowout,” said Matthew J. Harrigan, an analyst with Janco Partners in Denver who continues to have a “buy” rating on the shares. “The numbers were fine, but even without the deal announcement, I think the stock would still be down slightly.”

Comcast’s Class A shares declined $2.70 to $31.23 on Nasdaq, mainly in response to the Disney bid news, analysts said.

“Financially, we are better positioned today than I thought possible at the beginning of this year,” said Brian L. Roberts, Comcast’s president and chief executive.

“In 2003, we reduced debt by $7 billion and have significant cash and nonstrategic investments that provide added financial flexibility and strength.”

In 2003, Comcast added about 140,000 basic cable subscribers, ending the year with 21.5 million, compared with a loss of 415,000 the previous year.

Still, analysts were most concerned that it added just 1 million digital cable subscribers to end the year with 7.7 million, a 15.6% increase from the previous year.

Comcast added nearly 1.7 million high-speed Internet customers for a total of 5.3 million, an increase of 38.7% from the year before.