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Bereft of one-time gains, Comcast 1Q profit falls 12 pct

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[May 01, 2008]  PHILADELPHIA (AP) -- Comcast Corp. on Thursday reported a 12.5 percent decline in first-quarter profits from a year ago, when the company's earnings were inflated by a $300 million one-time gain.

The nation's largest cable operator posted net income of $732 million, or 24 cents per share, compared with $837 million, or 26 cents, in the quarter a year ago.

Excluding one-time gains from dissolution of cable partnerships, Comcast said quarterly profits were $588 million, or 19 cents per share, compared with $537 million, or 17 cents, last year.

That matched the average expectation of analysts surveyed by Thomson Financial.

Comcast had a $144 million gain in the quarter after it split a joint venture cable partnership with Insight Communications Co. Comcast received cable systems in Illinois and Indiana. Last year, Comcast posted a $300 million gain from the dissolution of a cable partnership with Time Warner Cable Inc., in which Comcast received cable systems in Houston.

Revenue was up 14 percent to $8.39 billion in the latest quarter. Analysts were expecting $8.17 billion.

Revenue rose as people spent more on cable television, which helped offset lower spending on the Philadelphia-based company's phone and Internet services.

Operating income was up 23 percent to $1.55 billion while free cash flow -- an important indicator for typically debt-laden industries such as cable -- soared by 59 percent to $702 million.

But the slowing economy seems to have exerted a drag on signing new customers: Comcast added 1.46 million lines of service in the quarter, down 20 percent from a year ago.

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The number of basic subscribers fell by 57,000, versus a gain of 83,000 a year ago. Digital cable added 494,000 subscribers compared with last year's 658,000.

Comcast said last year's digital rollout was heavier because it ramped up shipping of digital set-top boxes as a July federal deadline loomed to switch to set-tops with separable security.

The company added 492,000 new high-speed Internet customers, down 16 percent year-over-year.

But its digital voice service added 639,000 new customers, up 9 percent from last year. Its circuit-switched phone business, which Comcast is exiting, lost 110,000 customers.

Customers spent an average of $63.46 for cable TV, up from $59.97 in 2007's first quarter. Cable TV revenue rose by 5 percent to $4.71 billion.

For Internet service, where Comcast faces more competition, customers spent an average of $42.18, down from $43.08. Revenue for this business rose by 12 percent to $1.75 billion.

For digital phone service, subscribers spent $40.24, down from $42.44. Revenue, however, more than doubled to $573 million as the company siphoned customers from phone companies.

[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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