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Comcast's Solid Numbers Merit Your Attention

By David Smith - Updated Apr 6, 2017 at 12:26PM

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Comcast shares are slowly heading north. Why not take a close look at the company?

Comcast (Nasdaq: CMCSA), the big bear of the cable industry, has turned in second-quarter results that, depending on how you look at them, were either encouraging or softer than you would have liked.

I'll take the former approach, because, unlike some folks, I seem to have difficulty always taking a "half-empty" approach to the company -- and that's after a decade of following it closely. Indeed, from my perspective, its trajectory is decidedly upward.

For instance, its earnings slipped by $0.02 year over year to $0.31 per share. But the most recent quarter included $59 million of pre-tax costs -- $0.02 per share after tax -- related to the pending acquisition of a majority interest in General Electric's (NYSE: GE) NBC Universal, a transaction that may gain regulatory approval by year's end.

Beyond that, the year-ago quarter brought with it the recognition of $137 million of income tax benefits. That found money boosted the 2009 quarter by $0.04 per share. Take away the two special items, and the 2010 per-share number would have grown 13.8% over its predecessor.

But I can tell that you want to talk about operations. You're right: Video customers fell by 2.8% in the quarter. But digital video subscribers grew by 9.7%. That is a far more important metric for judging the strength of a video offering in today's world. Beyond that, high-speed data customers increased by 7.3%, and voice customers expanded by 16%. That shows how subscribers are availing themselves of Comcast's digital telephony service.

And there's more to the positive trends at the company. For instance, at Comcast Business Services, which is intended for smaller business and is really just getting started, year-over-year revenue grew by a healthy 54%, while advertising revenue increased by 23% -- at a time when advertising at The New York Times, for instance, remains essentially flat. Lastly, the programming segment's revenue expanded by 18.1%.

Next week, Time Warner Cable (NYSE: TWC), the second-largest of the cable operators, and Cablevision (NYSE: CVC) will both report on Wednesday, along with one of their key competitors, satellite video provider DirecTV (Nasdaq: DTV). I suspect we'll see many of the trends already exhibited by Comcast repeated at the other two cable operators.

In the meantime, I'd suggest that Fools pay careful attention to Comcast. The media industry isn't unanimously down and out.

Fool contributor David Lee Smith doesn't own shares in any of the companies named in this article. He does welcome your questions, comments, or golf tips. The Fool has a disclosure policy.

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