Looking at Comcast? Check the Real Numbers

Comcast (Nasdaq: CMCSA  ) lost 275,000 basic cable subscribers year over year in its most recent quarter. So why did it still trade higher after releasing that news? As it turns out, there may be other not-so-well-publicized reasons for the gain in Comcast's share price.

For the quarter, Comcast's consolidated revenue reached $9.5 billion, 7.3% higher than a year ago. The cable segment generated revenue of $9 billion, up 6.9% year on year. That figure included a 55% jump in the contribution from Business Services, and a 27% hike in advertising. Concurrently, the monthly average revenue per video customer increased 10.4% to $129.75.

Earnings per share declined 6.1%, from last year's $0.33 to $0.31. But if you back out costs related to the pending NBC Universal transaction, along with other special items, EPS actually grew by 14.3% in the quarter.

Investors' concern that cable companies might be clobbered by unstoppable competitors seems to be abating. Several years ago, the telephone companies' DSL offering seemed poised to obliterate cable's own Internet capability, but that concern never materialized.

Lately, fears about threats from telephone operators Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) , or satellite video providers DirecTV (Nasdaq: DTV  ) and Dish Networks (Nasdaq: DISH  ) , are becoming similarly less pervasive.

For my money, there are two of key -- albeit underappreciated -- reasons why Comcast will remain one of the more powerful media companies:

  • It's fine to be transfixed by the basic video customers dropping off the company's rolls. Just don't forget that the ranks of subscribers switching to digital video, and those bundling two or three of the company's triple-play offerings, are growing.
  • I also believe that investors are beginning to realize just how big a media juggernaut Comcast will create once General Electric's (NYSE: GE  ) NBC Universal can benefit from the management capabilities of CEO Brian Roberts' superb team.

Given those two significant items, I'd suggest strongly that Fools pay rapt attention to the solid expansion of King Comcast.

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We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Fool contributor David Lee Smith doesn't own shares in any of the companies named above. The Motley Fool has a disclosure policy.


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