Comcast, the nation’s largest cable TV provider, said Wednesday its fourth-quarter earnings fell 32 percent, hampered by a $600 million write-down of its investment in Clearwire, notes the Seattle PI.
Comcast’s revenue and adjusted earnings beat Wall Street estimates, and the company raised its dividend 8 percent. However, the Philadelphia-based company showed markedly slower growth in its video, high-speed Internet and phone businesses. Comcast shares were down 67 cents, or 5.2 percent, to $12.22 in midday trading.
Comcast said competition from phone companies has intensified. And fewer customers have been ramping up their subscriptions to more expensive tiers of service. Still, Comcast’s revenue rose 9 percent to $8.77 billion, ahead of analyst forecasts for $8.64 billion in revenue.
Sanford Bernstein analyst Craig Moffett said Comcast’s subscriber trends “were a disappointment” but noted that the “financial results are quite solid.”
The Clearwire write-down was expected; other Clearwire investors like Google, Intel and Time Warner Cable have recently taken similar charges against their earnings. The companies invested in Clearwire to develop wireless services, which cable operators need to offset an advantage held by phone companies.
A year ago, Comcast competed with telco video in roughly 10% of its footprint, it does so now in about 22%. It is fighting back: 66% of the high-speed data customers Comcast added last year converted from DSL versus 44% two years ago.
The company will spend between $400 million and $500 million this year rolling out all-digital products and DOCSIS 3.0 technology, which enables much higher broadband speeds, including 50-Mb/s offerings. Comcast said today it will bring DOCSIS 3.0 to 65% of its cable footprint by the end of this year.
The company ended the period with 14.9 million broadband customers. Revenue from broadband Internet services rose 9 percent to $1.86 billion.
Comcast added 247,000 digital cable subscribers in the quarter, down from last year’s 530,000. It added 184,000 high-speed Internet customers, down from last year’s 341,000, and it added 340,000 voice customers, down from last year’s 490, 000.
For the full year, Comcast earned $2.55 billion, or 86 cents per share, compared with $2.59 billion, or 83 cents per share, in 2007. The company’s revenue rose 11 percent to $34.3 billion in 2008.