Comcast CEO: Business Services Segment Drives Revenue Growth, Small Businesses Leading The Way

Led by booming business services revenue, telecom and cable behemoth Comcast reported a strong first quarter with revenue growth in nearly every business unit.

Comcast's business services revenue jumped 17.5 percent to $1.3 billion in first-quarter 2016, an increase that was largely driven by the addition of small-business customers during the first quarter, the company said.

ACE Consulting Group, a Fairhaven, Mass.-based provider of consulting services for cloud, voice and IT management services and a Comcast partner, has been deploying Comcast services for its small-business customers. According to Andrew Gregoire, CEO of ACE Consulting, Comcast's business services are priced perfectly for small and midsize customers.

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"It's a great small-business solution," he said. "The bigger players are leaving the space and letting Comcast take this [business]. It's the cost and speed – it's great bang for the buck."

Comcast also is a fitting secondary backup option for enterprise customers, Gregoire said.

The growth in business services is indicative of a large, attractive revenue opportunity for Philadelphia-based Comcast, according to CFO Mike Cavanaugh. The small-business segment accounts for about 75 percent of the provider's business revenue and 60 percent of its growth.

"This growth comes with very attractive margins for us," said Comcast Chairman and CEO Brian Roberts, who opened the earnings call Wednesday. "We continue to take share in the small-business [segment], and bring new competition and choice to midsize, as well as enterprise customers."

Comcast also added 438,000 new residential and business customers for high-speed Internet in the first quarter -- Comcast's best first-quarter result in four years, Cavanaugh said.

The high-speed Internet segment saw a 7.6 percent increase from $3.04 million in first-quarter 2015 to $3.28 million in first-quarter 2016 and is the largest contributor of overall cable revenue growth, he said.

Customer growth for high-speed Internet was strong. The provider added 38,000 net data customers during first-quarter 2016, including both residential and business customers.

"We continue to differentiate our product by increasing our speeds on existing tiers," CFO Cavanaugh said.

Video revenue increased 3.9 percent from $5.3 million in first-quarter 2015 to $5.5 million in first-quarter 2016, an increase that partially reflects an increase in the number of customers subscribing to additional services compared with one year prior, he said.

Like its carrier competition, Comcast did see revenue sink slightly in its voice segment, going from $906 million a year ago to $896 million during the first quarter, a decrease of about 1 percent.

Comcast posted earnings per share of 84 cents in first-quarter 2016, up from 81 cents a share in the year-earlier period. First-quarter 2016 revenue was $18.79 billion, compared with first-quarter 2015 revenue of $17.85 billion.

The company beat Wall Street expectations of 79 cents per share on revenue of $18.64 billion.