Comcast boasts 'outstanding' gains

Bolstered by a strong performance from its QVC home shopping network, Comcast Corp. yesterday reported strong gains in revenues and cash flow during a second quarter that one analyst described as "outstanding."

The Philadelphia-based cable TV company, which owns three cable systems in the Baltimore area, more than doubled its sales from the same quarter a year ago, largely as a result of its acquisition of QVC and the Maclean Hunter cable properties in the United States. Revenues for the quarter ended June 30 totaled $823.6 million, compared with $340.6 million a year ago. Excluding the acquisitions, Comcast still posted healthy growth in revenues -- a 17.5 percent increase to $400.1 million.

Comcast's operating cash flow, the most-watched indicator of a cable company's performance, increased to $260.8 million, compared with $148.6 million in the year-ago quarter. Excluding the acquisitions, operating cash flow reached $172 million, a 15.8 percent gain.

Paul Sweeney, an analyst with Wheat First Butcher Singer in Richmond, Va., said the quarterly results showed "the best growth we've seen since late 1993." The growth figures showed that the company is getting over the trauma of federal price regulation. "The worst is behind the cable television industry," he said.

Comcast's stock gained 37.5 cents to close at $19.625.

Excluding the Hunter revenues, Comcast's core cable business posted a revenue gain of 11 percent and a gain in operating cash flow of 15.4 percent, according to Comcast President Brian L. Roberts. Among those cable properties are the systems in Baltimore, Harford and Howard counties.

Those strong gains were surpassed by those at QVC, where sales increased 20.2 percent to $357.4 million and operating cash flow jumped 24.2 percent to $56.7 million. Comcast completed its acquisition of QVC in February.

Mr. Sweeney said the "great" results showed that QVC will be a valuable addition for Comcast. "It's going to be a very important growth driver for them."

The company's cellular business also posted strong gains -- 34.4 percent in revenue and 23.5 percent in cash flow.

Comcast also reported a net loss of $29.2 million, or 12 cents a share, compared with a loss of $12.9 million, or 5 cents a share, during the year-ago quarter. However, earnings are not as closely watched an indicator in the cable industry as in other businesses because of their high levels of depreciation, amortization and interest expense.

Mr. Sweeney said that, in fact, he'd prefer that cable companies not show profits because they would just have to pay taxes on it.

"I'd rather they keep the cash in house," he said.