* Q3 EPS 31 cents vs 33 cents year ago
* Rev up 7.3 pct to $9.49 bln; Street view $9.36 bln
* Loses 275,000 basic video customers
* Adds 249,000 Internet subs, 228,000 phone subs
* Shares close up 3.2 percent
(Adds closing share price)
By Paul Thomasch
NEW YORK, Oct 27 Comcast Corp (CMCSA.O)
reported better-than-expected earnings and revenue for the
third quarter, as customers signed up to more expensive
packages of cable, voice and broadband service.
The largest U.S. cable company stuck with a strategy it has
employed throughout the economic downturn: Concentrate on
upgrading customers to more expensive combinations of services,
such as broadband and cable, while not sweating the loss of
subscribers who only paid for lower-end basic cable.
While it lost 275,000 basic video subscribers in the third
quarter, the average revenue it earned for each video customer
rose by more than 10 percent.
"For most cable operators, it's about upselling their
existing base rather than trying to increase the number of
overall customers," said Tom Eagan, an analyst with Collins
Stewart. "They are willing to lose those customers that aren't
taking double or triple play packages."
Shares of Comcast, which hopes to soon win regulatory
approval to take control of NBC Universal, rose nearly 2
percent after its quarterly earnings report. The stock is up
about 17 percent this year.
Still, the loss of some 275,000 basic video customers is
significant. It is almost twice as many as Comcast lost a year
ago, and leaves it with slightly under 23 million video
The losses were also more than most analysts expected.
David Joyce of Miller Tabak, for instance, estimated losses of
221,000 and Todd Mitchell of Kaufman Brothers had the figured
pegged at a loss of 150,000.
NBC DEAL RUNNING ON SCHEDULE
Stiff competition from satellite and telecommunication
company rivals, such as DirecTV DTV.O or AT&T Inc (T.N), is
partly to blame, making it more difficult to keep existing
customers, or add new ones.
But Comcast Chief Executive Brian Roberts said the key
problem remains the "tough" economy and its one-two punch of
weak housing and high unemployment, both factors that play a
big role in canceling cable service.
Roberts added, however, that the company had seen a "real
year-over-year" improvement in subscriptions in recent weeks
and also noted a growing number of broadband and voice
subscribers. Comcast added 249,000 high-speed Internet
customers and 228,000 voice customers in the quarter.
Overall, revenue climbed 7.3 percent to $9.49 billion in
the third quarter. Net income slipped to $867 million, or 31
cents a share, from $944 million, or 33 cents a share, a year
Excluding costs related to the NBC Universal deal -- items
such as fees for lawyers and bankers -- the company posted
earnings of 32 cents a share. That surpassed the 30 cents a
share analysts had expected, according to Thomson Reuters
Roberts, on the call, said the NBC Universal deal was on
track to close this year. Once it does, Comcast would not only
be delivering customers TV shows and movies; it would also be
the company behind their production.
Terms call for Comcast to buy a majority stake from General
Electric Co (GE.N), giving it control of the NBC TV network,
plus a suite of cable channels, a movie studio and other
Shares of Comcast closed up 63 cents, or 3.2 percent, at
$20.27 on the Nasdaq.
(Reporting by Paul Thomasch; Editing by Derek Caney, Gerald E.
McCormick, Gary Hill)