Comcast Corp., the world’s largest cable-television provider, said third-quarter profit soared fivefold on the purchase of Adelphia Communications Corp. and record sales of telephone and digital-television services.
The shares rose as much as 4.5 percent after net income jumped to $1.22 billion, or 58 cents a share. Sales rose 22 percent to $6.43 billion, Philadelphia-based Comcast said today. Excluding gains related to Adelphia, profit was 26 cents a share, beating the 19-cent average analyst estimate.
Comcast added more new phone, digital-TV and high-speed Internet customers than analysts predicted. The company’s offer of all three services for $99 a month fueled the growth, Chief Executive Brian Roberts said. Next quarter will be “as good or better” Roberts told analysts today on a conference call.
“Comcast has delivered on high expectations,” said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York.
Moffett has an “outperform” rating on the stock.
Comcast signed up 483,000 new digital voice customers, up from 72,000 a year earlier, and 558,000 digital-cable customers, a 77 percent increase. About 536,000 customers bought high-speed Internet, the most for a quarter in two years.
UBS AG analyst Aryeh B. Bourkoff had estimated Comcast would sign up 430,000 phone customers, 449,000 digital-cable users and 469,000 high-speed Internet subscribers.
The stock has jumped 50 percent this year as the company won over customers with its phone service, surprising analysts with its growth. The shares gained 96 cents to $39.72 at 11:19 a.m. New York time in Nasdaq Stock Market composite trading.
Eighteen analysts recommend investors buy the shares, 10 say hold and two suggest selling.
Roberts accelerated the expansion of the company’s telephone service, offered over its cable lines, after conceding the company had been too slow in adding voice. Comcast, Time Warner Inc. and Cablevision Systems Corp. are now successfully using their package of phone, Internet and television services to challenge traditional telephone providers Verizon Communications Inc. and AT&T Inc.
“This may well be the inflection point for the cable industry and particularly for Comcast,” Roberts said on a conference call with analysts.
Comcast’s addition of high-speed customers contrasts with AT&T, the largest phone company, which disappointed investors, a signal that cable companies are gaining an edge over phone companies, Moffett said.
Historically a slowing of high-speed Internet service growth at telephone companies has been a harbinger for similar results from cable companies, Moffett said.
“Not this time,” Moffett said. “This could be a sign we are starting to see market-share shift to cable.” Comcast’s average revenue per user rose to $91.89 from $81.94, also beating Bourkoff’s estimate of $91.34.
“The company’s operational momentum is accelerating with each quarter,” Bourkoff said in an e-mail after the results.
Bourkoff, who is based in New York, has a “buy” rating on the stock.
Like Comcast, New York-based Time Warner Cable charges an introductory rate of $99 price a month for all three services.
Bethpage, New York-based Cablevision sells its package for about $90 a month.
Comcast closed on its $16.7 billion joint purchase with Time Warner Inc. of Adelphia on July 31. After trades of cable systems with Time Warner, the deal added 2.6 million subscribers to Comcast’s base in states such as Florida and Pennsylvania.
Comcast recorded a $669 million gain from the transaction.
Profit a year ago was $222 million, or 10 cents a share. Sales were $5.28 billion. If Adelphia’s results had been included for the full quarter and for the same period a year earlier, revenue would have risen 12 percent to $6.9 billion, Comcast said.
Pro-forma revenue from the cable business rose 12 percent from $5.9 billion to $6.6 billion.
The company also reported 10,000 new basic cable subscribers.
Bourkoff had estimated that the company wouldn’t add any.
Comcast’s cable systems added 24,000 basic customers, offset by the loss of 14,000 subscribers at the newly acquired Adelphia systems.
