NEW YORK Comcast on Thursday reported a 5.4 percent increase in first-quarter profit, as the cable giant posted net income of $778 million, or 27 cents a share, up from $738 million, or 24 cents a share, in the year-ago period.
Revenue rose 5.3 percent to $8.84 billion, an improvement on the $8.39 billion Comcast took in during Q1 2008.
CFO Michael Angelakis told investors that the company “executed well in a difficult environment, reflecting our continued focus on profitable growth.” Comcast was particularly successful in generating ready cash, reducing capital spending and generating $1.37 billion in free cash flow — an increase of 95.2 percent versus $702 million a year ago.
Angelakis said Comcast will use that cash to pay down its debt, although he added that the company may open the door to resuming share repurchases, a practice it halted in the fourth quarter of 2008. “We’re always evaluating our capital allocations strategy and that does include buybacks,” Angelakis said, before cautioning that economic uncertainty calls for a more conservative approach to spending.
“The economy is still very tough. Obviously there is some optimism out there, but if you look at vacancy rates and foreclosures and unemployment, there are some pretty troubling statistics,” Angelakis said.
The advertising market is another trouble spot, although national and local ad sales account for just 5 percent of Comcast’s total intake. In the quarter, Comcast’s ad revenue fell 25 percent to $262 million, while ad sales at the company’s programming unit dropped 8 percent.
Comcast’s cable network group — which includes E!, Versus, Style and Golf Channel — remained steady despite the loss of ad dollars, as overall revenue declined just 1 percent year-over-year to $361 million.
The economy also has started putting the squeeze on subscriber acquisitions in the last several weeks, as growth began showing signs of lagging. “It’s fair to say that in January and February we were feeling better, and that March and April have been slower,” said Comcast chief operating officer Steve Burke.
Comcast added 288,000 digital-video subs and 329,000 Internet customers in the quarter. On average, each video subscriber wrote Comcast a monthly check for $115.27, marking an increase of 8 percent versus the year-ago bill ($106.70).
Shares of Comcast rose 61 cents, or 4 percent, to $15.85 in early afternoon trading.