Earnings: Comcast Q3 Revs Up 21 Percent; Income Up 2 Percent

Comcast (NSDQ: CMCSA) revenues jumped 21 percent in Q3 to $7.8 billion from $6.4 billion in the year-ago period. Adjusted net income rose modestly to $560 million, or $.18 per share, from $548 million, or $.17 per share. Cable revenue was up 11 percent, to $7.4 billion, which the company chalked up to the continued success of the triple play. Total revenue generating units hit 55.8 million, up 13 percent. Some highlights:

Video: Net digital cable subscriber adds of 489,000 brought the company’s total to 14.7 million, or 61 percent of its cable subscribers. Video revenue increased 6 percent to $4.4 billion from $4.2 billion, reflecting growth in VOD, DVRs and HDTV.

High Speed Internet: Revenue grew 17 percent to $1.6 billion, with 450,000 subscribers added during the quarter. Total subscriber base is now 12.9 million, representing penetration of 26.8 percent of available homes.

Digital Voice: 662,000 digital voice customers were added during the quarter, while total phone revenue (including its legacy circuit-switched phone business) grew 86 percent to $472 million.

Release | Webcast | Slides (.pdf) | Transcript (via SeekingAlpha)

Conference Call: Increased competition, not surprisingly, was a major theme of the call. There is concern about Verizon (NYSE: VZ) and AT&T, as well as the satellite operators, particularly on the HDTV front. (From the transcript) COO Steve Burke: “RGUs were below where we thought they would be going into the quarter primarily due to basic subscriber and high-speed data performance. We think there are two reasons for this. First, competition has intensified. We launched the triple play in early 2006 and for some time the RBOCs and satellite companies did not compete with our bundle particularly effectively. Now it is clear that they are spending a lot more money, discounting more than before, bundling RBOC and satellite offers and launching two product bundles that are getting some traction.” He also mentioned a weakening economy and the effect that is having on pricing and upgrades.

HD Capacity: Burke stressed that the company is in good shape in terms of HD capacity, and that the issue will resolve itself as more subscribers make the switch: “As the country increasingly converts to HD — which is clearly happening at this point — we are anticipating HD sales this Christmas are going to be 30%, 40%, 50% higher than they were last year. Once a trend like that happens and the prices come down and the product is so good we would anticipate the high-def conversion to accelerate, not decelerate.”

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