Comcast loses 22 cents a share in 2Q

Loss compares with gain of 4 cents a share in 2001

cable giant's sales rise 16%

August 02, 2002|By BLOOMBERG NEWS

PHILADELPHIA - Comcast Corp., the third-largest U.S. cable-television company, had a second-quarter loss because of declining investments. Sales rose 16 percent as more customers bought digital cable and fast Internet access.

The net loss was $209.6 million, or 22 cents a share, compared with net income of $35.2 million, or 4 cents, a year earlier, the Philadelphia company said in a statement. Sales rose to $2.71 billion from $2.34 billion.

Comcast, which has 800,000 cable customers in Maryland, said demand for digital cable would top its forecast this year as the company prepares to complete the purchase of AT&T Broadband, the nation's biggest cable business.

Comcast has sought to compensate for slowing subscriber growth by getting people to sign up for pricier services, such as Web access and digital cable, which offers hundreds of channels.

The cable operator said it would have 700,000 to 800,000 digital-TV subscribers this year, up from a previous forecast of 600,000 to 700,000.

The recent quarter included a pretax loss of $459.1 million, primarily from an investment in AT&T. Comcast holds 41.5 million AT&T shares after selling about half its stake earlier this year.

AT&T agreed to issue more than 80 million shares to Comcast in May 2001 in settlement pertaining to Excite@Home Corp., an Internet-service provider that filed for bankruptcy protection.

Comcast's special Class A shares fell $1.79, or 8.5 percent, to $19.11 yesterday on the Nasdaq stock market. They have fallen 47 percent this year, about twice as much as the S&P 500 Index, partly on investor concern about the $20 billion in debt the company will assume as part of the AT&T Broadband deal.

Comcast common fell $1.86, or 8.5 percent, to $19.86.

The AT&T Broadband purchase, valued at $72 billion when it was announced Dec. 19, is still scheduled to close in the fourth quarter, Comcast said.

Operating cash flow, which Comcast defines as earnings before interest, taxes, depreciation, amortization, and investment gains and losses, rose 25 percent to $866.6 million from $692.9 million. The cash flow margin, or cash flow as a percentage of sales, climbed to 42 percent from 41 percent.

Many investors and analysts use cash flow to measure the performance of indebted cable operators because it excludes interest payments and non-cash charges, including amortization of goodwill, and focuses on results of the underlying business.

Comcast said it would meet its 2002 forecasts for sales growth of at least 10 percent and cash-flow growth of at least 12 percent.

The company will spend $1.3 billion upgrading and maintaining its cable systems, down from $1.85 billion last year.

In the recent quarter, Comcast added 198,000 digital-cable boxes and 128,400 high-speed Internet customers. Basic cable subscribers slipped less than 1 percent from the first quarter to 8.5 million.

Revenue at QVC, the home-shopping channel that is majority-owned by Comcast, rose 14 percent to $994.5 million from $876 million. QVC, which sells everything from computers to crab cakes, has helped fuel Comcast's revenue growth.

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