Comcast surges on reduced subscriber losses; posts best quarter in 5 years

Comcast stock jumped nearly 7 percent Wednesday morning after it reported that it lost just 17,000 basic video subscribers during the fourth quarter. Wall Street analysts had expected Comcast to lose more than 100,000 customers during Q4 as a result of competition from DirecTV, Verizon and other competitors, but it surprised analysts by posting its best quarterly performance in five years.

Comcast picked up 336,000 high-speed Internet subscribers and 146,000 voice subscribers in Q4. Combined video, cable modem and voice customers increased by 465,000, up 12.3 percent compared to this time last year.

Comcast ended 2011 with 22.34 million video customers, losing 460,000 customers since the fourth quarter of 2010. But it added 1.2 million cable modem customers and 732,000 voice customers last year.

arketing spending helped improve subscriber growth, Comcast executives told analysts. The nation's largest cable MSO said it was able to reduce its capital spending on hardware and other expenses by 1.8 percent to $4.8 billion in 2011.

But CFO Michael Angelakis said programming expenses "remain a challenge," noting that programming costs increased 5.8 percent in 2011. "We expect program expenses to grow at mid-to-high single-digit rates," he added.

Also worth noting from Comcast's Q4 earnings and conference call:

  • 25 percent of Comcast residential high-speed Internet customers subscribe to a tier that is faster than its standard 15 Mbps service.
  • Comcast said it sees an opportunity to generate $20 billion to $30 billion annually from business services, noting that it has reached a penetration rate for commercial services of just 10 percent.
  • It deployed 2.8 million high-definition set-tops and DVRs in 2011, along with 23 million digital terminal adapters in 2011.
  • Comcast increased the speeds of its entry level cable modem service from 12 Mpbs to 15 Mbps, and increased the speeds for its "Blast!" tier to from 20 Mbps to 25 Mbps. It has also introduced wideband Internet tiers offering speeds of 50 Mbps and 105 Mbps in several markets.