Comcast Corp., bolstered by its acquisition last year of the QVC home shopping channel, continued on a strong growth pace early this year as first-quarter revenues jumped 42.3 percent.
The Philadelphia-based telecommunications company, which owns three large cable TV systems in suburban Baltimore, reported yesterday that its revenues reached $950.7 million, compared with $663.6 million in the first quarter of 1995.
Comcast's operating cash flow increased 23 percent to $270.1 million, compared with $219.6 million during the year-ago
quarter.
Because of the high levels of depreciation and interest payments among cable companies, cash flow is generally given greater weight than net earnings in assessing corporate performance in the industry.
Comcast reported a net loss of $34.6 million, or 14 cents a share, compared with a loss of $628,000, or less than 1 cent a share, last year.
Charles P. Kersch, an analyst with Neidiger Tucker Brunder in Denver, said the Comcast report "looked great." Comcast shares closed yesterday at $17, up 48.4375 cents.
Even when the figures are adjusted to reflect the February 1995 acquisition of QVC, Comcast's gains in both revenues and operating cash flow appeared to be healthy. Adjusted revenues increased 19.7 percent. Cash flow increased 11.4 percent.
In part, the discrepancy between the two numbers reflects some weakness in the cash flow of its cellular telephone business, which posted an 8.7 percent decline despite a 19.5 percent revenue gain.
The company cited heavy losses from theft of services and from increased costs of attracting and retaining customers.
Kersch said the decline in cellular cash flow could be seen as a sign of strong growth in signing up new subscribers.
"When you are growing at that rate, you are paying your salespeople commissions immediately and taking a hit on it," he said.
QVC, the network that Comcast's founding Roberts family wrested from former Chairman Barry Diller, continued to show strong gains. Its revenue was up 25.5 percent and its cash flow increased 16.6 percent.
The company's healthy cash flow is allowing it to accumulate a war chest for its impending competition with the nation's telephone companies, especially Bell Atlantic Corp. The Baltimore area, where Comcast is upgrading its systems in Baltimore, Harford and Howard counties, is likely to be the first market in which the two companies go head-to-head.
Although Comcast has made no formal announcement, its executives have been quoted as saying that Baltimore County will be the first location in which it will offer Internet service over cable lines. That service would compete with a high-speed digital service called ISDN being marketed by Bell Atlantic.
The cable industry has high hopes that Internet service will give it a formidable competitive edge because coaxial cable can carry digital information much faster than even digital phone lines.
William Dordelman, a Comcast spokesman, declined to confirm reports that the company plans to roll out the service here during the third quarter. He said the company still is depending upon Motorola Inc. to deliver cable modems.
However, Dordelman did confirm that Baltimore is high on Comcast's list for receiving such service.
"It's got a lot of the reasons why it would be a good place to roll it out," he said.
Pub Date: 5/14/96
