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Earnings: Comcast Posts ‘Record Digital Quarter’ On PPV, HD Gains

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Comcast (Nasdaq: CMCSA) reported an 80 percent surge in profits for the quarter to end of March, net income rising to $837 million from $466 million in the same period last year. Revenue was up 32 percent to $7.39 billion, beating expectations.

— Video-related revenue rose eight percent to $4.4 billion, “reflecting increasing customer demand for digital features including on-demand, digital video recorders and high-definition television as well as higher basic cable pricing”, according to the conference call.
— The company added a record 75,000 basic customers in the quarter (up 49 percent form last year), and added a record 644,000 digital subscribers (85 percent annual increase) – a record. It now has 13.3 million digital customers, 55 percent of its total video customer base.
— PPV revenues rose 26 percent to $181 million (they have risen an average 20 percent over each of the last nine quarters). Comcast reported “strong increases in movie purchases”.
— Hi-def digital services were a particularly strong driver, with 38 percent of customers (some five million or so) now taking hi-def or DVR services (that’s a 70 percent increase over the same quarter in 2006), each paying $75pm or more.
— They ended the quarter with over 12 million high-speed data customers (26 percent of the total), having added 563,000 in the quarter – another quarterly record. Revenue from this segment increased 21 percent to $1.5 billion. “Our high-speed data business was plateauing two or three years ago and triple-play is really like a booster rocket to our high-speed business – we’re on a different trajectory than we were on a couple of years ago. For each of the last five quarters, we’ve added more high-speed customers than we did in the previous year.”

HD/DVR: “We’re seeing a lot of demand for hi-def and DVR boxes. Twenty percent of all of our 25 million customers now have hi-def or DVR or combined functionality, which is amazing since we’ve only been at it a few years. We added 535,000 of these advanced set-top boxes for the quarter.” Comcast intends to accelerate set-top box roll-out in the next quarter in order to comply with new security regulations by a July 1 deadline.

VOD: “The increase in purchases of movies is very substantial – if that increase would translate to a substantial increase in studio revenue from pay-per-view, our business would increase substantially as well. [We are] trialling in two markets – we’re actively talking to studios about adding a third market.” The company is “optimistic” it can expand the service nationwide.

Earnings Release | Earnings Call Transcript

One Response to “Earnings: Comcast Posts ‘Record Digital Quarter’ On PPV, HD Gains”

  1. Alfredo L. Rios

    Comcatst is the worst service in the north east region in the USA, they might make money, but talking about service is the worst, out services everyday cable , and internet for 4 5 hours a day , right now on this day 5/5/07 at 9:31 pm im writting here and waiting for service from comcast & PPV to watch DE LA HOYA FIGHT, alwasy something bad going on with comcast ..thats the reason they are SUCKSCASTIC!