Comcast posts solid numbers after merger

Comcast today held its first quarterly earnings call since the company completed its purchase of AT&T Broadband in November, and the numbers did not disappoint.

For the fourth quarter 2002, the company’s cable division posted pro forma revenues of $4.15 billion, an increase of 11% from the same quarter a year ago. Full year pro forma revenues for the cable division totaled $16.04 billion, up 11.3% from 2001. Pro forma numbers calculate the AT&T Broadband and other acquisitions as having occurred on January 1, 2001.

Pro forma video revenues for the fourth quarter grew 4.5% over the prior year to $2.88 billion. The number of cable subscribers fell on a pro forma basis by 9100, with a 49,700 subscriber loss from newly acquired systems partially offset by a 40,600 subscriber gain in Comcast’s historical systems. The company also added 389,400 digital subscribers for the quarter, giving it a total of 6.6 million digital cable customers.

High-speed Internet additions were also solid, with 367,000 fourth quarter additions giving Comcast a total of nearly 3.6 million broadband customers, almost a 50% pro forma increase from 2001.

Comcast’s consolidated revenue for the quarter, which includes the company’s content and commerce units as well as cable, was $4.37 billion, up 52.7% from the year-ago quarter, a jump that primarily reflects the AT&T Broadband acquisition. Consolidated net loss was $51 million, or 3 cents per share, far better than the $321 million, or 34 cents per share posted in last year’s Q4.

Full year 2002 revenue was $12.46 billion, up 26.7% from 2001. Consolidated net loss for 2001 was $274 million, or 25 cents per share, as compared to a net income of $609 million, or 63 cents per share in 2001.

In addition to providing results for 2002, the company took what has become an unusual step in the communications sector by giving extensive guidance for 2003.

The company lowered its capital expenditure forecast from the $4.2 billion to $4.5 billion range to an even $4 billion. Much of that decrease, said Co-Chief Financial Officer John Alchin, is due to a better understanding of the rebuild of AT&T Broadband networks.

“We have the experience of rebuilding 170,000 miles of our own plant and with that experience under our belt and all of the budgeting and detailed analysis of the 65,000 miles of plant of AT&T Broadband that has to be rebuilt, we now fully understand the timing and the cost of this rebuild,” Alchin said.

Comcast expects to report earnings before interest, taxes, depreciation and amortization (EBITDA) for 2003 of $6.2 to $6.3 billion, far head of the $4.9 billion generated prior to acquisition costs last year.

The company forecasts adding between 1.3 million and 1.4 million broadband Internet subscribers in 2003, bringing the its total broadband subscriber count to about 5 million. Comcast also expects to grow its digital cable subscriber base by between 950,000 and 1 million next year, giving that service a total of 7.5 million subs.