Comcast fourth-quarter earnings soar 54 percent on customer spending

PHILADELPHIA — Comcast Corp., the nation's largest cable operator, reported a 54 percent increase in fourth-quarter profit on solid revenue gains as customers spent more for cable TV.

In a bow to the desires of agitated shareholders unhappy with its weakened stock price, Comcast also said it will start paying a 6.25-cent quarterly dividend starting at the end of April.

Moreover, the Philadelphia-based company is pledging that by the end of 2009, it will spend the remaining $6.9 billion it has allotted to buy back shares — in a bid to satisfy a growing chorus on Wall Street to step up its repurchases.

Shares jumped more than 7 percent, or $1.28, to $19.09 at the open of trading.

In the fourth quarter, Comcast reported a net income of $602 million, or 20 cents per share, compared with $390 million, or 13 cents, in the same period a year ago.

Analysts surveyed by Thomson Financial were expecting profit of 17 cents per share.

Operating cash flow in the quarter was $3.08 billion, up 19 percent year-over-year, while free cash flow tripled to just a tad over $1 billion.

Revenue was up 14 percent to $8 billion, beating Wall Street's $7.9 billion average forecast.

The company added 1.2 million revenue generating units — the number of services sold and a key metric of performance — down from 1.6 million in 2006.

For the year, Comcast posted a 2 percent increase in profit to $2.59 billion, or 83 cents per share, as revenue rose by 24 percent to $30.9 billion.

Among its business segments, Comcast said video revenue rose by 6 percent to $4.5 billion in the quarter. The average cost per customer rose to $61.72 a month from $58.19, which could be a combination of higher prices and more services ordered.

The number of basic subscribers fell by 94,000, compared to a gain of 111,000 in 2006. Even its digital sign-ups slowed, adding 523,000 compared with 614,000 in the prior year.

Comcast's high-speed Internet business saw a 14 percent revenue gain to $1.7 billion. But the company added 331,000 new customers compared with 490,000 in 2006. The average cost per customer fell, as well, to $42.44 from $42.89 a month, perhaps reflecting the effect of competition.