Comcast reports a jump in net to $16.8 million for quarter Recovery from a loss aided by $40.6 million from Teleport IPO

August 13, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Comcast Corp. said yesterday that its key earnings measure rose 13.5 percent during the second quarter.

A successful crackdown on cellular phone fraud and big gains at its QVC cable shopping network led the way.

The Philadelphia-based cable company, which operates local systems in Baltimore, Howard and Harford counties, reported net income of $16.8 million, compared with a loss in last year's second quarter.

The primary difference was a $40.6 million gain from the initial public offering of Comcast affiliate Teleport Communications Group Inc. in June.

But analysts who watch Comcast follow cash flow measurements more closely than net income, and said that the company faces stiff depreciation charges and interest payments from building its network of cable systems that cloud its operating strength.

Comcast's cash flow -- profits before interest payments and depreciation -- jumped to $296 million from $261 million, UBS Securities LLC analyst Rick Westerman said, beating the New York investment firm's estimates by $11 million.

"In general, Comcast was a little better than expected," he said.

"Principally, the difference [between expectations and what happened] was in its cellular division, where the company rebounded from fraud."

The news helped the company's stock slightly yesterday.

Comcast shares rose 18.75 cents to $15.25 on the Nasdaq stock market.

The company said the results showed solid growth in each of its three main businesses: cable television distribution, the QVC shopping channel and cellular phone service.

Revenue from Comcast's cable operations rose 9.2 percent to $395.9 million. Operating cash flow from cable jumped 9.6 percent to $200 million.

QVC boosted sales 14 percent to $405.8 million and its cash flow rose 18 percent to $66.9 million.

Westerman said QVC is less profitable than cable because of the wholesale cost of the goods sold on the channel.

Comcast cellular operations, which include a stake in the Sprint Spectrum personal communications services, or PCS, system serving the Baltimore-Washington area, are much smaller than either the cable systems or QVC.

The cellular businesses reported a 16 percent increase in revenue to $108.9 million and a 7.7 percent increase in operating cash flow to $42.6 million, primarily because of the crackdown on theft of service.

Pub Date: 8/13/96

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