PBT Transcript (5/01/2008)

MIKE ARMSTRONG: Coming up: Angry about big profits posted by big oil? We’ll tell you how one local oil company lost money last quarter. Building power plants is always controversial. Exelon announces two for Philadelphia this week; one’s green, the other’s not. And we have earnings news from Comcast. Is the cable giant reeling from its customer service woes or reeling in the profits? Philadelphia Business Today starts now.


MIKE ARMSTONG: Who’s hurting from the high price of oil? Drivers like you and me, but also Philadelphia’s own Sunoco. The company lost $59 million on sales of nearly $13 billion in its first quarter. A year ago? It booked a profit of $175 million on sales of more than $9 billion. How does Sunoco lose money when other oil companies are posting huge profits? Not all oil companies are equal. The giants like BP, and Royal Dutch Shell pump oil and natural gas from underground and under the sea. Sunoco is a smaller company. It’s mostly in the refining business. The only way it gets oil is to buy it from the big boys. And oil has never been more expensive. Another factor: Sunoco says customers bought less gasoline compared to last year. All that means red ink for Sunoco’s bottom line.

It’s great to talk about going green, but when you really want more power, there’s no substitute for carbon-based fuels. On Tuesday, Exelon executives were all smiles, talking about their latest investment in solar power at the Philadelphia Navy Yard. The $11 million project will generate enough power for only 200 homes a year. Today, Exelon, which owns PECO in Philadelphia, says it wants to build a 600 megawatt plant to produce electricity. A plant that size would produce enough electricity for nearly 525,000 homes. The source of all that energy? Natural gas.

Americans can’t be Americans without their gasoline, electricity and, apparently, their cable t.v. and high speed internet service. Comcast today said the revenue it generates from cable rose 5% to $4.7 billion in its first quarter. While it lost 57,000 basic subscribers, it’s been converting more of its customers to digital cable. Comcast added almost 500,000 digital cable subscribers in the quarter. The news wasn’t all wonderful. Net income fell 13% from the first quarter of 2007, but free cash flow, the most important measure for the cable business, rose 59%.

That’s it for today. At the Inquirer, I’m Mike Armstrong for Philadelphia Business Today.


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