Comcast may be seeing subscriber pressure

Summary:Comcast reported its second quarter earnings Thursday and the financials results were fine. The subscriber numbers, however, may indicate increased competition.

Comcast reported its second quarter earnings Thursday and the financials results were fine. The subscriber numbers, however, may indicate increased competition.

The cable giant reported a profit of $588 million, or 19 cents a share, on revenue of $7.7 billion, which was up 31 percent from a year ago. The results were in line with Wall Street estimates.

But the subscriber totals are where things get interesting. The following stats may indicate that Comcast is feeling some pressure from Verizon FiOS (see gallery right).

A few points:

  • Comcast reported 12,380,000 cable modem subscribers in the second quarter, up 18 percent from a year ago. However, that sum was below the 12,440,000 projected by Morgan Stanley.
  • VOIP subscribers came in at 3,097,000 better than the 3,073,739 projected by Morgan Stanley.
  • High-speed Internet subscribers grew by 330,000 in the second quarter, the same sum as a year ago.
  • Comcast lost 95,000 basic video customers in the quarter. Reuters notes that's worse than estimates. Comcast was pushing digital video ahead of CableCARD boxes.
  • Capital spending was up 52 percent to $1.6 billion.

Adding up these crosscurrents I come up with the following:

  • Comcast is swiping telephone customers from existing carriers among entrenched cable modem customers.
  • Comcast is starting to feel some pressure from Verizon for Internet access. Whether that evolves into television remains to be seen.
  • The capital spending is largely related to advanced services to compete with things like Verizon FiOS.

It's too early to call anything definitive, but it's worth monitoring.

Topics: Hardware, Networking

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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