May 1 (Bloomberg) -- Comcast Corp., the largest U.S. cable- television company, reported a 13 percent drop in profit from a year earlier, when results were bolstered by a one-time gain. Sales surpassed estimates on new Internet-access subscribers.

First-quarter net income fell to $732 million, or 24 cents a share, from $837 million, or 26 cents, a year earlier, Philadelphia-based Comcast said today in a statement. Sales rose 14 percent to $8.39 billion, beating analysts' $8.17 billion average estimate compiled by Bloomberg. Profit met estimates.

Revenue from Web access rose 12 percent to $1.75 billion, while digital-phone-service sales doubled to $573 million. Cable companies are relying on telephone and Internet services for growth as the video market matures and AT&T Inc. and Verizon Communications Inc. expand their TV offerings. Comcast's basic cable subscribers fell.

``The results are likely to be amply good enough to satisfy an antsy group of investors,'' Sanford C. Bernstein & Co. Craig Moffett said in an interview today. Moffett doesn't own shares and expects the stock to outperform its peers.

Comcast rose $1.03, or 5 percent, to $21.58 at 10:09 a.m. New York time in Nasdaq Stock Market trading, the most since February. The stock had climbed 13 percent this year before today.

Internet subscriber growth was ``the highlight'' of Comcast's report, Moffett said.

`Taking Share'

``The cable industry is now taking share in the broadband market in big gulps from the telcos,'' Moffett said.

About two-thirds of Internet subscriber growth came from telephone customers, Chief Operating Officer Stephen Burke said on a conference call with investors.

Excluding one-time items in both periods, profit rose 9.5 percent to $588 million, or 19 cents a share, matching the average of 17 analysts' estimates compiled by Bloomberg. Last year, the company recorded a $300 million gain from the dissolution of its Texas/Kansas City cable partnership.

Comcast reiterated its 2008 outlook, projecting revenue growth of 8 percent to 10 percent. Capital spending will decline to about 18 percent of sales, and free cash flow will increase by at least 20 percent.

The company added 639,000 digital telephone customers after signing 587,000 new accounts a year earlier. It was the only category in which Comcast signed up more subscribers than in the first quarter of 2007.

Subscribers

Basic subscribers fell by 57,000, after rising by 83,000 a year earlier. Digital video customers expanded by 494,000, less than last year's 658,000. The addition of 492,000 high-speed Internet subscribers compares with 586,000 added in the first quarter of 2007.

``They put up some very strong subscriber metrics,'' JPMorgan Chase & Co. analyst Jonathan Chaplin said in an interview today. He is neutral on whether clients should buy Comcast stock and doesn't own any shares.

Average revenue per Internet customer dropped about 2 percent, indicating Comcast subscribers are choosing lower-cost, lower-speed tiers of Internet access as they switch from slower telephone company products, said Chaplin.

During the quarter, Chief Executive Officer Brian Roberts responded to shareholder pressure to reduce spending and hand more money back to investors, instituting the company's first dividend since 1999.

The company also repurchased $1 billion of its shares in the quarter, double the year-earlier total, and said in February it will buy back $6.9 billion worth over two years.

Cash Flow

Free cash flow rose 59 percent to $702 million, as the company reduced capital spending to $1.43 billion from $1.45 billion a year ago.

``It seemed there was a meaningful shift in management's approach,'' Chaplin said an interview before earnings were released. ``Now you've got the best set of assets in the cable industry coupled with a management team that is starting to look at returns for equity holders.''

The buyback and annual dividend of 25 cents followed criticism from investors including Chieftain Capital Management Inc. over Comcast's acquisitions and capital spending.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

Last Updated: May 1, 2008 10:12 EDT