Comcast continued its earnings winning streak, announcing not only higher revenues but also sharp increases in operating income and cash flow, from the sale of advanced services. The company also said it would add one million digital voice customers in 2006.

“We are extending our competitive advantage by delivering industry-leading products and our results demonstrate that our strategy is working,” said Comcast Chairman and CEO Brian Roberts. “We are continually enhancing the TV viewing experience, providing more choices for our customers who are embracing a new way to watch television.”

The company also announced a $1billion investment in its own stock, including a $752 million stock repurchase and a cash settlement of exchangeable debt for $253 million. Overall, Comcast reported revenue of $5.578 billion for the quarter ended September 30, 2005, representing a 9.4% increase from the third quarter of 2004. Operating cash flow was 2.099 billion, and net income was $222 million or 10 cents a share.

“Our businesses continue to deliver strong operational and financial results as we post our 21st consecutive quarter of double digit Operating Cash Flow growth,” Roberts said. “Our Cable division delivered revenue growth of 9.8% and Operating Cash Flow growth of 13.9% contributing to consolidated revenue growth of 9.4%, consolidated Operating Cash Flow growth of 12.9% and an increase in consolidated operating income of 28.6%.”

Comcast trails most of its cable brethren in adding digital voice subscribers, with only 46,000 adds nationally for a net addition of 12,000 once circuit-switched customer losses are factored in, but now has the service available to 12 million households and will be aggressively marketing voice as part of a service bundle, COO Steve Burke said. The company expects to see the kind of growth that Time Warner Cable and Cablevision have been reporting and those companies are adding up to 10,000 digital voice subs a week. “It is clear to us demand will not be an issue,” he told analysts. “We think we are very well positioned to exceed 1 million units in 2006.”

Financial analysts seemed most concerned about Comcast’s cap-ex spending in the quarter, which Roberts and Burke related primarily to the unexpectedly high sales of advanced set-top boxes with DVR and high-definition TV capabilities. Cable capital expenditures increased 3.2% to $899 million compared to the $871 million in the third quarter of 2004, reflected the advanced box deployment and costs associated with Comcast Digital Voice.

“DVR and high-def adoption is much greater than we thought,” Roberts said. “That’s a good thing because when we do install an advanced set-top box at $400, we get $10 a month, which is a nice return. But we do have to invest the capital up front.”

Roberts did express some frustration with the way Wall Street continues to view his company, despite its stellar financial performance, but said Comcast will continue to invest its free cash flow in strengthening both its financial and technological position.

“We will take advantage of our synergy and find opportunities to create value,” he said. “We will continue to just remain differentiated, we will not be commoditized. The value is not falling, the grass is not greener, we are not going to allow any innovation to pass this company by. We continue to hear about new technologies that are going to change everything that are not really there and yet this industry continues to march ahead.”

The joint venture with Sprint and three other cable companies, announced a day earlier, is a prime example of technology innovation, he added. It will enable Comcast to quickly offer a “quadruple play” that combines wireless into its service bundle and to develop new video content for mobile devices as well as converge wireless functionality into home communications, he said.

“We are marketing our phone products to 12 million phones and I don’t think any of the RBOCs are actively marketing any video in our footprint,” Burke added. “The impact of a FiOS type video service is minimus. No matter how you paint a picture of the world we are going to be marketing phones to many people, and it remains to be see whether the RBOCs are going to have any impact on our business at all.”