Comcast Earnings Up on Subscriber Growth

Comcast Corp. on Wednesday reported a 16.6 percent rise in third-quarter cash flow, the measure preferred by analysts for capital-intensive cable firms, as its digital cable and high-speed data services gained subscribers and its QVC home shopping channel took off.

The No. 3 U.S. cable company, which is bidding for AT&T Corp.'s cable assets, said operating cash flow rose to $705.8 million from $605.7 million a year earlier. Revenues increased 20 percent to $2.36 billion from $1.96 billion. 

Its shares rose 27 cents to $35.70 in midday Nasdaq trading on Wednesday, rising as much as 3 percent earlier in the session. 

"Cash flow was better than the Street was expecting," said ABN Amro analyst John Martin. 

"In particular, QVC continues to show no correlation to the overall retail environment. And we would have expected this quarter above any other, we would have seen some negative impact," he said. 

QVC was taken off the air for 22 hours after the Sept. 11 attacks on the United States and felt the pinch of slowing demand thereafter. Nevertheless, the unit posted a 10 percent increase in cash flow on a 9 percent increase in revenues. 

Analysts prefer cash flow as a measure of performance because it excludes charges and expenses associated with upgrading their systems and acquisitions. 

Including those charges, the company reported a net loss of $106.8 million, or 11 cents a share. That compared with a year-earlier profit of $1.25 billion, or $1.29 a share, which was boosted by a one-time gain relating to its investment in the now-bankrupt high-speed Internet provider ExciteAtHome. 

In a conference call with investors, Comcast also repeated its forecast for digital cable subscriptions to grow to 2.3 million this year. The company said it finished the third quarter with 2.12 million digital cable subscribers, up 243,400, or 21 percent, from the second quarter. 

Comcast added 117,100 subscribers to its high-speed Internet service, bringing the total to 792,700, and maintained its guidance for 950,000 subscribers by the end of the year. 

It ended the quarter with 1.2 million homes upgraded for video-on-demand services, with 2 million expected to be VOD-ready by the end of the year. 

Overall cash flow at the cable division rose 13 percent on a 10 percent increase in revenues. 

Comcast, which also owns stakes in the Philadelphia Flyers and Philadelphia 76ers sports teams, has swapped a number of systems with other operators and made several acquisitions in the last year. Assuming the same portfolio of assets, third-quarter cash flow rose 13.6 percent on a revenue increase of 10 percent.