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MAVIS SCANLON
The bright spot of Comcast's earnings announcement last week was RGU, or revenue-generating-unit, growth.
The Philadelphia-based company ended the quarter with 915,000 net new RGUs - a net addition rate of 17,600 per week throughout the quarter.
Comcast's cable operations posted pro forma revenue growth of 7.9% to $1.1 billion, up from $998.9 million in the third quarter of 1999. Pro forma cash flow for the quarter grew 10.1% to $496.5 million.
Overall, Comcast reported consolidated revenue of $1.9 billion, up 22.6% from $1.6 billion in the 1999 period. Consolidated operating cash flow - the main indicator of the health of a cable company - jumped to $605.7 million, up 31% from the $463.9 million posted in the year-earlier period.
Broadband services helped pave the way to the higher results, with the company's digital penetration increasing to 17% from 8% in the year-ago period. Comcast finished the quarter with more than 1.13 million digital customers, adding 190,000 digital customers in the quarter, or 14,600 per week. Comcast upped its year-end estimate for digital customers to 1.35 million from 1.25 million.
Niraj Gupta, an analyst at Salomon Smith Barney who last week initiated coverage of Comcast and three other cable operators, said in a research note he expects Comcast's digital subscribers to increase by 60% next year to more than 2 million.
Insight Communications also reported earnings. Its acquisition of systems in Kentucky helped boost revenue to $119.3 million, an increase of 156%. That acquisition, as well as the consolidation of Insight Ohio, helped pumped up cash flow, which jumped to $70 million for the three month period, up from $1.8 million in the Sept. 1999 quarter.
Penetration at Insight Digital has reached 20% within a year of its launch, the company says, helping boost revenue per subscriber to $43.46, up 2.1%. By year's end, Insight's plant upgrade will be nearly 90%, allowing further penetration of digital services. In addition, the company is on track to launch telephony services in Louisville, Ky., early in the first quarter.
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