Stock of the Day
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Comcast (CMCS.A)
Comcast Profits Rise While Subscribers Decline
As the largest cable company in the United States, Comcast Corporation is regarded as a "stock to watch" in the media sector, so everyone paid attention when the company announced its earnings yesterday. If you weren't paying close attention, however, you could have heard two very different stories. If you listened primarily to what the company was saying, you probably would have focused on the positive news - the company beat profit expectations, earning 33 cents per share, which beat estimates of 26 cents per share, and indicated a solid increase from the 21 cents per share years a year ago. Revenue rose slightly as well, gaining 4.5% to $8.94 billion.
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But if you think that a rise in profit corresponds to an increase in subscribers, you weren't paying close enough attention. Some of the profit gains can be attributed to a rise in prices, something which is never a big hit with consumers, and there were also some consumers who decided to increase their at-home media spending as they cut back on outside entertainment such as going to a movie theater. However, the number of new customers heading towards Comcast for any media service was much, much lower than before. The number of Internet subscribers plummeted 77%, and the number of video and television customers dropped as well. Furthermore, ad revenues continued to fall, dropping 20%, as advertisers have been more reluctant to advertise in this economy. With a continuing decrease in subscribers, and a lack of ads to show its current customers, there is unfortunately no indication for Comcast that this downward trend will reverse itself anytime soon.
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Comcast Commentary:
Comcast rakes in the dough; Continues to poach voice customers - Charts and trends for some of the aspects of Comcast's earnings report.
Domain Helper National Rollout Begins - Details from Comcast about their new Domain Helper technology.
Comcast adopts DNS hijacking, imposes irritating opt-out - One of many negative responses to Domain Helper.
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More Stocks in the News:
Has Cisco's John Chambers Lost His Mind? - A closer look at the CEO of Cisco, as the company reported a 46% drop in profits.
Sirius XM Still Shedding Customers, Albeit Slower - Sirius deals with many of the same issues as Comcast in today's earnings report.
Prudential Profit Beats Estimates as Assets Advance - Prudential makes headlines for reporting their first quarterly profit in a year.
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Profile |
Click here to view a detailed profile of Comcast.
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