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.
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.