Business World

Comcast Corp. on Thursday reported a 12.5% decline in first-quarter profits from a year ago, when the company’s earnings were inflated by a $300 million one-time gain.

The nation’s largest cable operator posted net income of $732 million, or 24 cents per share, compared with $837 million, or 26 cents, in the quarter a year ago.

Excluding one-time gains from dissolution of cable partnerships, Comcast (CMCSA, Fortune 500) said quarterly profits were $588 million, or 19 cents per share, compared with $537 million, or 17 cents, last year.

That matched the average expectation of analysts surveyed by Thomson Financial.

Comcast had a $144 million gain in the quarter after it split a joint venture cable partnership with Insight Communications Co. Comcast received cable systems in Illinois and Indiana. Last year, Comcast posted a $300 million gain from the dissolution of a cable partnership with Time Warner Cable Inc. (TWC), in which Comcast received cable systems in Houston.

Revenue was up 14% to $8.39 billion in the latest quarter. Analysts were expecting $8.17 billion.

Revenue rose as people spent more on cable television, which helped offset lower spending on the Philadelphia-based company’s phone and Internet services.

Operating income was up 23% to $1.55 billion while free cash flow — an important indicator for typically debt-laden industries such as cable — soared by 59% to $702 million.

But the slowing economy seems to have exerted a drag on signing new customers: Comcast added 1.46 million lines of service in the quarter, down 20% from a year ago.

The number of basic subscribers fell by 57,000, versus a gain of 83,000 a year ago 500 fast cash. Digital cable added 494,000 subscribers compared with last year’s 658,000.

Comcast said last year’s digital rollout was heavier because it ramped up shipping of digital set-top boxes as a July federal deadline loomed to switch to set-tops with separable security.

The company added 492,000 new high-speed Internet customers, down 16% year-over-year.

But its digital voice service added 639,000 new customers, up 9% from last year. Its circuit-switched phone business, which Comcast is exiting, lost 110,000 customers.

Customers spent an average of $63.46 for cable TV, up from $59.97 in 2007’s first quarter. Cable TV revenue rose by 5% to $4.71 billion.

For Internet service, where Comcast faces more competition, customers spent an average of $42.18, down from $43.08. Revenue for this business rose by 12% to $1.75 billion.

For digital phone service, subscribers spent $40.24, down from $42.44. Revenue, however, more than doubled to $573 million as the company siphoned customers from phone companies. 

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