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Comcast Earnings Down on NBCU Costs

PHILADELPHIA (TheStreet) -- Comcast (CMCSA) saw earnings fall during the third quarter, weighed down by transaction costs related to its takeover deal with General Electric's (GE) NBC Universal.

For the quarter ended September 30, the company saw earnings fall 8.2% to $867 million, or 31 cents per diluted share, compared with earnings of $944 million, or 33 cents per diluted share, in the same period a year ago. Earnings from continuing operations were 34 cents per share, which beat analyst estimates of 30 cents a share.

Revenue rose 7.1% to $5.91 billion from $5.52 billion during the quarter. Revenue from its cable segment increased 6.9% to $9.0 billion from $8.4 billion, attributed to a 55% increase in business services and a 27% increase in advertising revenue, as well as the growing number of subscribers.

A 3.5% decrease in video subscribers was offset by a 13.2% growth in voice customers and a 6.5% increase in high-speed Internet customers. The monthly average revenue per video customer was up 10.4% to $129.75 in the third quarter.

"Our results mark the third consecutive quarter of accelerating growth in revenue and operating cash flow, driven by overall customer growth, a robust advertising market and continued strength in business services," chairman and CEO Brian Roberts said.

The company's programming segment revenue increased 8.7%, driven by a strong advertising market across its networks and strong ratings at E!.

Warnings were hampered by $27 million in transaction costs related to the deal with NBC Universal. In December 2009, General Electric announced a joint venture agreement with Comcast. Through the deal Comcast will own 51% of NBCU and 49% would be owned by GE, but managed by Comcast.

For the nine months ended September 30, earnings remained relatively flat, coming in at $2.62 billion, or 93 cents per share, compared with earnings of $2.68 billion, or 93 cents, in the same period a year ago. Profits were weighed down by $57 million in costs related to the NBC Universal deal.

Revenue rose 5.8% to $17.34 billion from $16.38 billion, driven by gains in its cable and programming segments. Cable revenue increased 5.2% to $26.6 billion compared to $25.3 billion while its programming segment revenue was up 11.3% to $1.3 billion.

Management believes that "focus on consistently improving the customer experience and on driving profitable growth will further strengthen our competitive position and build long-term value for our shareholders," Roberts said.

During the third quarter, Comcast repurchased 17.5 million of its common shares for $300 million and paid cash dividends totaling $265 million.

--Written by Theresa McCabe in Boston.



>To contact the writer of this article, click here: Theresa McCabe.

>To follow the writer on Twitter, go to @TheresaMcCabe.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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