Comcast profit up on Internet, phone subscribers

Comcast posted a higher-than-expected quarterly profit as it added Internet and phone subscribers, but its margins were hit by marketing costs as the No. 1 U.S. cable operator fends off competition from phone and satellite companies.

The Philadelphia-based cable company added a net 247,000 high-speed Internet customers and 243,000 digital phone subscribers in the fourth quarter. Comcast lost more than 199,000 basic video subscribers during the quarter. The company changed its strategic focus midway through 2009 to "proactively pursue market share." "That translates to lower price increases for customers and greater promotional spending," said Collins Stewart analyst Thomas Eagan. "That's why the fourth-quarter customer numbers were better than people expected but some of the financials were worse." Comcast's fourth-quarter net profit rose to $955 million, or 33 cents a share, from $412 million, or 14 cents a share, a year earlier. After adjusting for a tax benefit, profit was 29 cents a share. Revenue rose 2.9 percent to $9.07 billion.

Stacey Higginbotham says the telling points in Comcast's report are the three big forward-looking strategic initiatives the cable operator plans to focus on this year: 1) expanding its mobile broadband offering through Clearwire, 2) deploying some type of interactive advertising and 3) signing up carrier customers for mobile backahul. It will also complete the rollout of its DOCSIS 3.0 broadband, which can deliver speeds of up to 50 Mbps; expand its TV everywhere product, Xfinity; and attempt to close the joint venture with GE over NBC Universal.