Comcast revenues jump 12.7%

Comcast today impressed Wall Street by reporting a 12.7% increase in revenues for the third quarter.

For the quarter ending September 30, the company posted $2.7 billion in revenues, up from the $2.4 billion posted a year ago. Net income for the quarter was $75.6 million, or 8 cents per share, up from a net loss of $106.8 million, or 11 cents per share year-over year.

Comcast’s cable division pulled its own weight in the period, posting a year-over-year revenue increase of 12.3% to $1.55 billion. The number of cable subscribers grew to 8.5 million, a 0.7% increase over the past 12 months. More importantly, the company increased its number of high-value digital subscribers to 2.1 million. Approximately 24.9% of its subscribers now take digital service, up from 19.4% a year ago.

The company’s high-speed Internet unit grew significantly during the quarter as well more than doubling its revenue from a year ago to $155.5 million. In addition, the division added 169,800 subscribers, giving it a total of 1.3 million, a 32.2% sequential increase in net adds.

In addition to reporting financial results, the company provided an outline of its plans after the proposed merger with AT&T Broadband is closed. Because of the sale of its stake in Time Warner Entertainment and the successful exchange of AT&T bonds, the company said it will not have to access the capital markets this year.

“Our liquidity has increased significantly and we expect to reduce debt in 2003 by $4 [billion] to $5 billion to approximately $25 [billion] or $26 billion,” said John Alchin, Comcast’s executive vice president and treasurer.

The company also said it has designated six of its own executives to run the merged company’s six divisions, including new divisions based in Denver and San Francisco, which will focus on operating the firms cable systems in the western U.S.

In addition, Comcast says it has outlined operating principals for the new company and is aiming to have a comprehensive, fully vetted business plan ready to be put into action immediately after the merger is closed.

According to Stephen Burke, president of Comcast’s Cable Communications unit, improving cash flow will be the combined company’s first priority. The merged AT&T Comcast will also focus on video and not telephone, will work to stem basic subscriber loss, increase revenues through repackaging and remarketing digital and premium services and seek to “right-size” the company over time, Burke said.

Comcast was trading up nearly 3% to $24.52 in mid-afternoon trading.