The nation’s largest cable company reported a 10 percent rise in revenue in the third quarter (over Q3 2007) along with a 38 percent rise in net income and a 44 percent hop in earnings per share, to 26 cents.
The results demonstrate “the underlying strength of our subscription businesses and our ability to operate well in a a challenging economic and competitive environment,” Comcast Chairman and CEO Brian Roberts said in a statement.
The company dropped 147,000 basic video subscribers and added 417,000 digital subs in the quarter. As of Sept. 30, 69 percent (16.8 million) of Comcast’s video subscribers had digital service. About 44 percent of those digital subscribers (7.3 million) have either HDTV or DVR service or both.
Despite a 10 percent drop in ad revenue from the year-ago quarter, revenue grew at Comcast’s cable segment (including video, Internet and phone). Average monthly revenue per subscriber grew 9 percent from $101.74 to $110.71.
The company added 483,000 phone customers, bringing its total to 6.1 million. Phone revenue jumped 44 percent over Q3 2007, to $690 million.
Comcast’s move to woo over-the-air customers during the DTV transition continues; the company is offering a year free video to those who purchase of other services (or, $10 a month by itself)
In a conference call with analysts, Comcast said that with all the current distractions—namely the economy—customers are anticipated to make television decisions closer to the end of full-power analog in February. On its last earnings call, in July, the company estimated that as many as 2 million households in its footprint could lose signals and seek pay TV after the transition.
“We think a lot of people are going to be out of the digital footprint and they have to do something,” a Comcast officer said.
The company said the company would roll out its partnership with TiVo beyond its test market in Boston, including to Chicago in 2009. DOCSIS 3.0, which promises super-fast Internet service, is now with only a few hundred customers but is .planned for wider rollout.
Comcast is finding ways to save, also. Capital expenditures have dropped, in part due to slowed growth but also because of obtaining better prices on infrastructure from set-top boxes on up the line. Better system reliability has reduced truck rolls and problem calls.
A Comcast officer also assessed the growing competition from AT&T’s U-Verse service as “formidable,” thanks mainly to that company’s giant footprint. But an exec said Comcast is taking more phone and data customers away from AT&T and Verizon than those companies are taking video customers from Comcast.
Comcast stock, which had lost a third of its pre-meltdown value of more than $20 per share (dropping to just above $13), rose on the earnings news to above $15 Wednesday morning (Oct. 29).