RealTime IT News

Comcast's Pro Forma Growth

On paper, it looks like Comcast had a good first quarter in 2002, with a pro forma revenue increase of 12 percent and pro forma operating cash flow growth of 18.3 percent, for a reported $2.673 billion in consolidated revenues, officials announced Wednesday.

But the company posted a net loss of $88.9 million for the quarter compared to the net income of more than $1 billion at this time last year.

Brian Roberts, Comcast Corp president, said the numbers were in line to meet the company's stated year-end projections for 2002.

"The cable division reported one of its best quarters ever, accelerating revenue and operating cash flow growth and delivering new digital and high- speed Internet customers, even as we completed the huge task of transitioning almost one million customers to our new high-speed Internet service," he said.

It's been a busy quarter for the third-largest cable operator in the U.S., with the completion of its @Home migration and a bid to take over AT&T Broadband , the largest cable network in the nation.

The true costs of these efforts (i.e., pro forma), as well as various and other sundry acquisitions to grow its cable holdings, are usually not reported. Pro forma results normally exclude one-time costs, like the very real expense of equipment write-downs and acquisition costs.

In this case it seems the cable company just can't catch up with its rate of growth, resulting in the company reporting numbers from operations it acquired in June of 2001 but not those acquired afterwards.

Also, the company had to deal with the migration of 950,000 customers from @Home, which involved a huge one-time expense of routers and other networking equipment -- as well as backoffice support -- to get a viable, nationwide broadband Internet service provider (ISP) outfit running.

To its credit, Comcast included in this quarter's report the depreciation and amortization costs of $734.7 million and tax expenses of $485.6 million -- the TDA in the earnings before interest, taxes, depreciation and amortization (EBITDA) -- and other charges resulting from dabbling in stocks.

Outside the financial numbers, Comcast continues to shine, reporting the pro forma growth of its high-speed cable Internet service to 1.041 million customers, a pro forma increase of 81 percent over 2001 levels.

In this case, pro forma numbers "assume that all acquisitions were effective on Jan. 1, 2001," Comcast's financial report stated.

With 92,4000 new high-speed customers in the first quarter, Comcast's expansion plans continue apace. With more than 81 percent of the homes in the Comcast network eligible for broadband services, it's achieved a penetration rate of nine percent.

Comcast's cable division accounts for a lion's share of the company's many revenues sources (which include QVC commerce and channels like the E! Network and The Golf Channel), and will only grow more as it gets closer and closer to a possible AT&T Broadband buyout.

"We are more excited than ever about the opportunities for growth in the cable business and look forward to completing our merger with AT&T Broadband," Roberts said. "We believe our strong track record of operating performance, successful system integration and balance sheet strength will help support accelerated growth rates and provide a whole new range of opportunities for the new company."