October 6, 2008 - Comcast Corp. (CMCSK-NASDAQ) together with its subsidiaries, operates as a cable operator in the United States. It offers various consumer entertainment and communication products and services. The company operates in two segments, Cable and Programming. The Cable segment manages and operates cable systems, including video, high-speed Internet, and phone services, as well as regional sports and news networks. Its video services include basic and digital cable, video on demand, high-definition television, digital video recorder, premium channel programming, and pay-per-view programming services. This segment's high-speed Internet service consists of its interactive portal, Comcast.net, which provides multiple email addresses and online storage, as well as various proprietary content and value-added features and enhancements.

The Programming segment operates its consolidated national programming networks consisting of E!, The GolfChannel, VERSUS, G4, and Style. Comcast Corporation also owns the Philadelphia Flyers, the Philadelphia 76ers, and two multipurpose arenas in Philadelphia, as well as manages other facilities for sporting events, concerts, and other events; and develops and operates its Internet businesses that focus on entertainment, information, and communication, including Comcast.net, Fancast, the Platform, and Fandango. As of December 31, 2007, the company served approximately 24.1 million video subscribers, 13.2 million high-speed Internet subscribers, and 4.6 million phone subscribers; and passed approximately 48.5 million homes in 39 states and the District ofColumbia. Comcast Corporation was founded in 1969 and is headquarteredin Philadelphia, Pennsylvania.

Love it or hate it, Comcast is a major factor in the cable business and is moving quickly into the digital phone business. No matter how you feel, the company keeps making more money.

This year, earnings should be 89 cents a share, up from 74 cents last year (+28.3%). Next year, look for $1.10 (up another 23.5%). Earnings for the third quarter (according to the 19 analysts following the stock) should be 22 cents a share, up from 18 cents last year in the same quarter. Those earnings will be announced on October 29. Next quarter expect 24 cents a share.

What's interesting about Comcast is that it's doing very well in a very bad economy, almost immune to the slowdown that many other businesses experience. That's because the cable service has become almost a utility, a necessary for the household. While consumers can cut back on many expenses, it seems as if cable isn't one of those. At least that's how it used to be. There's a new development occurring that may give Comcast and all cable companies a real scare.

It's consumers watching television on the computer. Television shows are online, through Web sites like Hulu.com, in addition to free broadcasts picked up over the airwaves. Consumers can also buy set-top boxes that allow them to stream shows via Netflix.com to their television sets, including episodes of NBC's "The Office" and Showtime's "Weeds."

But it's not all bad news. Comcast offers high speed, high bandwidth Internet service, a preferred choice for many customers who are migrating from DSL. So while some cable customers are cancelling their cable, they're ordering Comcast's Internet high speed service to watch tv programs.

Having described that concern, know that revenues at Comcast were up 11% in the second quarter, showing more new customers are being added as well as additional services. In the quarter, 320,000 new cable subscribers joined, and there's strong demand for DVRs (Digital Video Recorders) and on-demand tv. The average monthly bill per subscriber went from $101 per month to $110 per month in the quarter.

The company has real growth opportunities in phone services. In the second quarter, digital phone service sales jumped by 50% as consumers sign up for the package of cable and phone. So far, the company is servicing only 12% of its market potential.

More numbers: Market Cap is $80 billion. There's $2 billion in cash. There are 3 classes of stock: common, Class A, and Class A Special shares and Class B where the Class A shares can't vote and Class B shares have 15 votes per share. All told, there are 3.9 billion shares outstanding: 2.058 billion common Class A; 849.856 million Class A Special shares; and 9.444 million Class B shares. All numbers reported here are for the Class A Special shares. Over the next 5 years, analysts see average annual revenue growth of 16.5% and earnings of 25.5%.

Comcast is bundling services for the 21st century consumer: TV, phone and Internet. No matter how you get your entertainment and information, no matter how you communicate: via phone or email, Comcast will either bring it to you or facilitate what you want to do. That's why the company's earnings are growing so noticably, and why investors should spend some time digging more into the company.

Company Web site: www.comcast.com

- Ted Allrich