Analysts: Comcast answers phone challenge
'Telcos' loss has been Comcast's gain,' one saysNEW YORK -- Shares of Comcast Corp. rose almost 5% Wednesday even though the largest U.S. cable operator reported mixed second-quarter results showing weakened subscriber momentum.
But analysts lauded growth in major financial metrics and the fact that the company reaffirmed its 2008 outlook. They said Comcast hasn't been hurt by the weak U.S. economy and that it has taken market share from big telecom firms who have posted lackluster results this quarter.
"The telcos' loss has been Comcast's gain," Sanford C. Bernstein analyst Craig Moffett said. "Cable is taking share, and it is taking it in gulps."
Comcast's quarterly profit rose 7.5% to $632 million as revenue increased 11% to $8.55 billion.
The company lost 138,000 basic cable subscribers in the traditionally weak second quarter, but analysts had expected a bigger decline.
Comcast also added 555,000 digital phone users and 278,000 high-speed Internet customers. Those figures were below the year-ago gains, but analysts said they were strong enough to explain weak broadband additions by Verizon and AT&T.
Total cable revenue rose 7% in the quarter, while revenue at Comcast's TV networks increased 10%.
Chairman and CEO Brian Roberts lauded the results as evidence of "the strength of our businesses even in a challenging economic environment." Comcast said it saw a $315 million benefit from the economic stimulus package that provided tax rebates to American consumers.