NEW YORK — Announcing its quarterly results Wednesday, Comcast beat most of its earnings estimates, adding 394,000 high-speed data subscribers and 35,000 basic cable subs, boosting cable cash flow by a hefty 21% to $1.7 billion and pushing up its margin to a comfortable 37%.
Total cable sales for the first quarter grew 9.8% over the same period last year to $4.6 billion, thanks to hefty gains from high-speed data and higher digital video spending per subscriber.
Digital adds came in at 192,000 new customers, slightly lower than expected, but company noted it had increased average revenue per sub from $41.33 in the fourth quarter of 2003 to $42.46 in the first quarter of 2004.
Comcast said it generated nearly $400 million in free cash flow after all taxes and interest.
Chief financial officer John Alchin said Comcast’s video-on-demand service now reaches more than 11 million of its 21 million subs, while more than 19 million can receive high-definition service.
Comcast added 176,000 HD subs in the last three months to bring its total HDTV base to 469,000, a 60% jump over the last quarter of 2003.
Company also said it was catching up on the DVR front and would have the boxes available across its entire footprint by the end of this year. Integrated set-top DVRs are available in 14 Comcast markets.
High speed continues to be the big revenue driver, with another 1.5 million-1.6 million new customers expected this year.
With 36% of Comcast subscribers now taking digital, sub growth is slowing slightly. Company forecasts it will add between 700,000 and 1 million digital cable subscribers this year, though Comcast is focusing more on increasing profitability in its premium services.
Said exec VP Steve Burke: “Our VOD model is to deliver as many hours of programming as possible for free in order to increase usage and differentiate what we do” compared with DirecTV, for instance. He said customers with the service use it 14 or 15 times per month on average.
Burke said the company was also satisfied by its ability to ratchet down percentage programming cost increases on its cable nets to the single digits.
The cabler’s content division, which comprises its stakes in E! Entertainment, the Golf Channel, Outdoor Life and G4, recorded first-quarter sales up 21.7% to $176 million, with each net reporting double-digit revenue growth.
Operating cash flow grew nearly 68% over the same period a year ago due in large part to strong growth at E! and Golf.