Comcast subscribers, profits dip in Q4

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Comcast on Wednesday reported a lower fourth-quarter profit because of a charge and said it lost 233,000 basic cable subscribers during the period as sub momentum slowed in the face of the recession and increased competition.

Signaling confidence in its free-cash-flow generation, the largest U.S. cable operator boosted its annual dividend by 8% to 27 cents a share, but analysts said the raise was conservative considering a 56% improvement in free cash flow last year. Some on Wall Street also said they would have preferred more stock buybacks, which the company has suspended because of the uncertain credit markets and economy.

In another sign of the effects of the recession, Philadelphia-based Comcast didn't provide specific growth targets for 2009. But management signaled better basic-subscriber momentum during the first quarter than the fourth and warned that local and national advertising revenue has continued to weaken and will remain under pressure this year.

Comcast posted a fourth- quarter profit of $412 million, down 32% from the year-ago period, thanks in part to a $378 million after-tax asset impairment charge on its investment in wireless high-speed Internet provider Clearwire. Profit excluding the charge rose 31% to $790 million on an adjusted basis.

Quarterly revenue rose 9% to $8.8 billion, and operating cash flow increased 9% to $3.4 billion.

The company added 247,000 digital cable subscribers during the latest quarter, down from 530,000 during the year-ago period, and 184,000 broadband users, down from 3(pi)41,000. Ad revenue fell 5%, or 20% excluding strong political revenue.

"Despite a very difficult economic environment, we met or exceeded all of our financial targets (for 2008), demonstrating the strength of our subscription businesses," Comcast chairman and CEO Brian Roberts said. "For 2009, our goal is to continue to deliver growth, even in this challenging environment."

Management said Comcast reacted to the economic downturn early, reduced headcount by 3,300 positions last year and has promoted economy-tier services. (partialdiff)
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