Cable Technology Feature Article
Comcast Adds Q1 Subs, Talks to Charter about Divesting Others
By Tara Seals, TMCnet Contributor
No. 1 cable MSO Comcast (News - Alert) has managed to claw its way out of the cable churn bucket, adding basic video subscribers for the second consecutive quarter. Meanwhile, Bloomberg is reporting that Comcast is close to a deal to sell 1.5 million subs to Charter Communications (News - Alert), with plans to spin off another 2.5 million into a new, publicly-traded company in which Charter will have a minority stake.
In all, Charter is expected to pay $20 billion in total and give 275,000 L.A. subs to Comcast, which stands to dominate the L.A. market should regulators sign off on its $45 billion deal to acquire Time Warner (News - Alert) Cable, as part of an asset swap.
A deal could be announced this week, but sources caution talks could still fall apart. Reuters previously reported Charter is talking with Comcast about an $18 billion to $20 billion deal involving the acquisition of 3 million subs.
For now, Comcast added 24,000 paying television subscribers in the first quarter, bringing its customer total to 22 million video customers. First-quarter net income rose by 30 percent as ad revenue spiked at broadcast network NBC, thanks to the Winter Olympics in Sochi and Jimmy Fallon's debut as host of "The Tonight Show." Overall revenue was up 28.8%, to $6.9 billion; and revenue was up 8.1% when the Games are excluded.
Comcast’s total net income across all divisions for Q1 rose to $1.87 billion or 71 cents a share, from $1.44 billion, or 54 cents a share a year ago. Excluding one-time items, adjusted earnings came to 68 cents a share, beating the 64 cents expected by analysts polled by FactSet (News - Alert).
Revenue grew 14 percent to $17.41 billion from $15.31 billion—beating the expected $16.99 billion forecast by analysts.
Revenue specifically from cable TV services ticked upward slightly, to $5.2 billion.
Comcast meanwhile added 383,000 high-speed Internet customers to reach 21 million; revenue from Internet services was up 9%, to $2.8 billion. The MSO’s home telephone business grew by 142,000 customers, raising revenue to $920 million for the quarter.
And finally, releases of Ride Along and Lone Survivor, along with the international release of the Wolf of Wall Street, drove the company’s film division revenue up 11.1%, to $1.4 billion.
Edited by Maurice Nagle