Net income improved from a loss of $199 million in the first quarter of 2000 to a gain of $1 billion, or $1.04 per diluted share, in the most recent period. That turnaround, though, was due primarily to one-time gains: a $1.2 billion gain from an exchange of cable-TV customers and systems with Adelphia Communications Corp., a $384.5 million gain from an accounting change involving derivatives and a $1.1 billion gain stemming from the same accounting change regarding its investment in Sprint PCS.
Comcast said it now expected its cable division to perform better this year than it initially projected.
"We are confident about our full-year growth prospects and are increasing our full-year guidance for cable cash flow growth to 12 percent to 13 percent, up from our previous expectation of 10 percent to 11 percent," said Brian L. Roberts, Comcast president.
The company noted that during the first three months of this year, it made two significant deals:
It bought Home Team Sports, a Washington-Baltimore regional sports network that it has renamed Comcast SportsNet.
It gained 1.21 million cable-TV subscribers from AT&T Corp. and Adelphia, while trading away 1.14 million Comcast subscribers to the two companies. The swap allowed Comcast to consolidate many of its cable-TV systems; one result, Comcast said, was the cutting of 300 jobs in Michigan.
Also during the first quarter, Comcast formally launched Comcast Business Communications, which started selling telecommunications services to small- to medium-size businesses in Baltimore. The new division, which also includes Comcast's start-up wireless telecom operations in Europe, reported $9.5 million in revenue and an operating cash flow loss of $35 million in the quarter.
Comcast also said it was renegotiating a highly favorable contract it has with AT&T involving shares of ExciteAtHome, the high-speed cable-modem service Comcast partly owns. In January, Comcast exercised its right to exchange 31.2 million shares of ExciteAtHome - valued at a price well above Excite's current stock price - for shares of AT&T stock.
Comcast would not elaborate on what the renegotiation could mean, but AT&T is in the midst of dividing itself into three publicly traded companies plus a tracking stock.
Patricia Horn's e-mail address is firstname.lastname@example.org.
Company Symbol Exchange
Comcast Corp. CMCSK NASD
1 qtr. '01 1 qtr. '00 Pct.
end 3/31 end 3/31 chg.
Revenues (millions) $2,196.1 $1,938.9 +13
Net income (millions) $1,001.2 $199.0 N.C.
Per share $1.04 $.24 N.C.
N.C. = not calculable
Effective Jan. 1, 2001, Comcast adopted a new financial accounting standard regarding derivative instruments and hedging activities that resulted in an after-tax gain of $384.5 million, or 40 cents per share. In addition, the company had to reclassify its investment in Sprint PCS because of the accounting change, resulting in the company's recording pre-tax investment income of $1.1 billion, or 74 cents per share. Comcast also recorded a gain of $1.2 billion, or 81 cents per share, from its exchange of cable-TV systems and customers with Adelphia Communications.