Comcast may be the nation's largest cable operator, but it's the growth of other parts of its business — it added more Internet and phone subscribers — that drove growth last quarter.
Comcast's fourth quarter results beat Wall Street analyst projections for both profit and revenue. Comcast's fourth quarter net profit, excluding one time items was 29 cents per share, up from 25 cents a share a year ago, on 2.9 percent higher revenue of $9.07 billion. Comcast's free cash flow — a key metric in the cable industry — grew over 20 percent in the quarter, as the company has gradually reduced capital expenditures.
The upside came from far bigger than expected subscriber additions — net 247,000 broadband subscribers and 243,000 digital phone subscribers, giving the phone companies (T, VZ) a real run for their money. This growth stands in sharp contrast to Comcast's loss of 151,000 video customers. These numbers speak to the company's comments on the earnings call that it's increased marketing efforts for high-speed Internet customers as well as the triple play (cable, phone, internet), and these numbers speak to that.
On the earnings call CEO Brian Roberts talked in detail about the company's push to reposition itself technically, and also change its image with consumers. "Xfinity" is the new brand it's giving it's cable products, and it'll roll out this year in 11 markets, starting wit a marketing push at the Olympics. Roberts says the idea is to give customer more choices and convenience in how they consume content — more on-demand choices, and the option of accessing cable content on demand, online. Internally, there's a company-wide initiative to increase the speed of getting innovations to market.
Comcast is investing in making Internet and online video speeds faster, and converging services like Internet and cable. The company's been investing in "wideband and "all-digital rollouts." This basically means getting faster broadband speeds to consumers, the kind of speeds that will improve online video, and provide more flexibility in terms of what people can watch on-demand, online.
Comcast's ad results seem disappointing at first glance — ad revenue down over 7 percent for the quarter. But once political ads are removed from the comparison revenue increased 10 percent over the year-ago quarter. Roberts wouldn't comment in any depth on NBC Universal's results as the companies await approval for their merger, but did say that it's impressive how broad the change in sentiment is for the advertising outlook. "It seems the world is getting better," Roberts said. Adding that he "sees no reason not to be optimistic."
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