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Comcast 3Q profit rises 38 percent, ups outlook

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[October 29, 2008]  PHILADELPHIA (AP) -- Comcast Corp., the nation's largest cable operator, on Wednesday reported a 38 percent increase in earnings for the third quarter as a sharp drop in capital spending and higher cable TV rates buoyed its bottom line.

Bucking the trend among cash-strapped companies, Comcast also said it expects to exceed its free cash flow growth forecast of at least 20 percent in fiscal 2008.

Auto RepairBut the company, mindful of the tight credit market, said it won't be using up all of funds approved to buy back shares by the end of 2009. Instead, it will proceed more cautiously depending on market conditions. Comcast has $4.1 billion remaining on the repurchase program.

In the quarter, Comcast earned $771 million, or 26 cents per share, compared with $560 million, or 18 cents, a year ago. Adjusted net income excluding one-time items rose by 23 percent to $691 million, or 24 cents per share.

Revenue was up 10 percent to $8.55 billion.

Analysts were expecting a 22-cent-per-share profit and slightly higher revenue of $8.59 billion, according to a Thomson Reuters poll.

Operating cash flow was $3.24 billion, up 10 percent, while free cash flow rose by 77 percent to $928 million. Capital spending fell 16 percent to $1.31 billion.

While Philadelphia-based Comcast continued to add digital cable, phone and Internet customers, it did so at a slower clip than in last year's third quarter. Still, the company continues to take market share away from phone companies in voice and high-speed Internet.

Comcast ended the quarter with 14.7 million broadband customers, within striking distance of overtaking AT&T Inc. as the largest wired Internet service provider in the country. Comcast added 382,000 new Internet subscribers in the quarter, two-thirds of whom switched from digital subscriber line service, or DSL, a phone company product. Still, subscriber growth was down 19 percent from a year ago, though revenue rose 9.4 percent to $1.82 billion.

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Video revenue was up 3.6 percent to $4.7 billion, helped by higher rates and new digital TV customers. Comcast lost 147,000 basic subscribers in the quarter -- of which 15,000 was the result of hurricanes Ike and Gustav -- but added 417,000 new digital TV customers.

Video customers on average shelled out $63.74 per month for TV service, up 5.3 percent year-over-year, due to higher rates and purchases such as pay-per-view. Internet customers paid $41.74 a month in the quarter, down 2.2 percent from last year.

Comcast added 483,000 digital phone customers, down 29 percent from the 2007 quarter. Customers paid $38.98 per month for the service on average, down nearly 5 percent. New customers bolstered phone revenue by 61 percent to $688 million.

The company affirmed its fiscal 2008 outlook for an 8 percent to 10 percent increase in revenue and operating cash flow and a reduction in capital spending to 18 percent of revenue.

[Associated Press; By DEBORAH YAO]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



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