Comcast 2Q Profit Rises 28 Percent

PHILADELPHIA -- Comcast Corp., the nation's largest cable TV operator, reported a 28 percent increase in second-quarter profit Thursday as it saw a surge in subscribers for digital TV and its promotionally priced package of TV, Internet and phone services reeled in customers.

But investors were disappointed by declines in basic video subscribers and the smaller-than-expected growth of high-speed Internet subscribers. Analysts also said given Comcast's recent string of strong results, shares sold off because the company didn't raise guidance.

Craig Moffett, an analyst at Sanford Bernstein in New York, said investors were also disappointed that Comcast failed to announce an expansion of its stock buyback program.

"The stock seems to be reacting to what they didn't say," he said. "Expectations have gotten pretty high."

Its shares fell $1.33, or 4.7 percent, to $27.21 on Thursday amid a broader market pullback.

The Philadelphia-based company earned $588 million, or 19 cents a share, in the April-June period compared with $460 million, or 15 cents a share, a year ago.

Revenue rose 31 percent to $7.71 billion from $5.91 billion a year ago.

Analysts surveyed by Thomson Financial expected, on average, profits of 19 cents a share on revenue of $7.71 billion.

Comcast, which has more than 24 million cable TV subscribers, said video, Internet and phone revenue combined rose 12 percent to $7.3 billion in the quarter. Operating cash flow rose by 13 percent to $3 billion. Figures have been adjusted to account for the purchase of Susquehanna Communications and Adelphia, the swap of cable systems with Time Warner, and other transactions.

Net additions in revenue generating units, an industry measure of performance, nearly doubled to 1.6 million, a second-quarter record at Comcast. RGUs count the number of individually subscribed services, so two customers each subscribing to digital cable and high-speed Internet would count as four RGUs.

Breaking down operations into business segments, cable TV revenue rose by 7 percent to $4.5 billion in the quarter.

Revenue received from each video customer on average _ what customers paid the company for cable TV and related services _ hit triple digits for the first time, to $101.02 from $90.76 per month. Eighty percent of digital subscribers pay $65 or more per month for services.