Hurricane, Other Costs Hurt Comcast Earnings

Comcast Corp., the nation’s largest cable TV operator, on Thursday reported a 69% plunge in fourth-quarter profit because of costs related to Hurricane Katrina and other storms, lower investment income and a sharply higher tax rate.

It’s the first time since the third quarter of 2004 that profit has fallen at the Philadelphia-based company.

Comcast earned $133 million, or 6 cents a share, for the fourth quarter, far below its profit of $423 million, or 19 cents, for the final three months of 2004. Revenue rose 9% to $5.7 billion.

The company’s cable and high-speed Internet business remained robust. Cable revenue rose 8% and Internet revenue gained 24%. Revenue collected per subscriber rose 9% to an average of $84.12 a month.

Some analysts were disappointed with Comcast’s phone business, even though the company hit its target of adding 200,000 subscribers. It now has about 2 million phone customers.

Independent industry analyst Jeff Kagan of Atlanta questioned whether the company had the ability to “compete effectively” against the regional phone giants, saying Comcast was the last cable firm to offer voice service last year.

But executives said the company had aggressive plans this year. Chairman Brian L. Roberts said Comcast expected to attract 1 million new telephone customers in 2006. The company also expects cable and consolidated revenue to increase by as much as 10%.

Shares of the company fell 97 cents, or 3.5%, to $27.02.

Results include a $495-million decline in investments and other income, relating to litigation and noncash investments. Comcast also said its tax rate rose to 69% from 49% last year.

The hurricanes took a $48-million bite from Comcast’s operating cash flow in the quarter. They also cost the company 20,000 basic cable customers.

Excluding the investment decline, Comcast’s profit would have come to $186 million, or 9 cents a share, compared with adjusted earnings of $91 million, or 4 cents, in the fourth quarter of 2004.

Operating income soared by 26% to $893 million.

For the year, Comcast’s net income came to $928 million, or 42 cents a share, compared with $970 million, or 43 cents, a year earlier. Full-year revenue rose 9.6% to $22.3 billion.

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Associated Press was used in compiling this report.