Comcast 3Q customer growth to slow, but NBC Universal deal to overshadow earnings report

Earnings preview: Comcast to report 3Q results

PHILADELPHIA — Comcast Corp., the nation’s largest cable TV operator and largest home Internet service provider, reports third-quarter earnings before the market opens on Wednesday. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: Comcast is expected to report slower customer growth in the third quarter from the same quarter last year, but results will be an improvement over the second quarter of 2009. Competition continues to weigh on the cable operator, which is battling not only satellite TV deals but aggressive promotions from Verizon Communications Inc.

BY THE NUMBERS: Analysts, on average, expect Comcast’s revenue to increase by 3.5 percent to $8.85 billion from a year ago. They expect earnings per share to fall by a penny to 25 cents, according to a survey by Thomson Reuters.

ANALYST TAKE: Tuna Amobi from Standard & Poor’s expects Comcast to add about 300,000 new digital cable customers, at least 350,000 phone customers and 250,000 Internet subscribers. He sees Comcast continuing to lose basic cable subscribers.

WHAT’S AHEAD: Comcast is negotiating to buy a 51 percent stake in NBC Universal from General Electric Co. and a deal is expected to be announced shortly. NBC Universal will be spun off and GE will have the option to divest its remaining 49 percent stake over the next few years.

Amobi said the deal itself will overshadow the earnings report because investors will be anxious to find out how the acquisition will affect Comcast’s financials. Comcast is expected to contribute $4 billion to $6 billion in cash and contribute its cable networks to the new company. The spun-off NBC Universal is expected to have $10 billion to $12 billion in debt.

STOCK PERFORMANCE: Shares of Comcast, which is based in Philadelphia, rose $2.42, or 16.7 percent, during the quarter to $16.88. The stock beat the S&P 500 Index, which rose by 15 percent during the same period.