NEW YORK — Profits from one-time asset sales helped cable giant Tele-Communications Inc. overcome weak operational earnings and turn a profit of $318 million in the first quarter, it said Wednesday, compared with a loss of $58 million a year ago.
The profit was mainly due to profits made on the sale of the Southern Satellite Systems subsidiary to Time Warner Inc. and New York-area cable systems to Cablevision Systems Corp.
Operationally, the quarter was less impressive. TCI’s earnings before interest, taxes, depreciation and amortization — cash flow — fell 4.3% to $706 million on 2.5% higher revenue of $1.87 billion, however.
The cabler blamed higher programming costs charged by cable networks since the start of the year, as well as higher marketing spending and the cost of rolling out digital cable services.
“TCI Group’s first-quarter results were in line with our expectations,” said TCI president Leo Hindery. The result was released after the close of trading, when TCI stock had finished up 72¢ to $34.93.
The cable systems part of the group, excluding Liberty Media and the TCI Ventures affiliate companies, had a flat quarter with a 1.2% decline in cash flow to $656 million on 1.4% higher revenue of $1.57 billion. Adjusted for sales of cable systems, the cash flow decline was 0.6%, the cabler said.
Hindery said in a statement that TCI’s increased marketing spending was helping boost customer growth. TCI’s basic cable customer count rose 115,000 during the quarter to 13.5 million, excluding the loss of 1 million subscribers from the sale of systems in partnership deals done during the quarter.
The cabler is also moving ahead with its digital roll out. By the end of April, TCI had 275,000 digital cable customers. “We are on target to have between 800,000 and one million digital cable customers by year end 1998,” Hindery said.