* Posts two straight quarters of basic video subscriber gains
* Proposed Time Warner Cable takeover still pending regulatory approval
* Negotiating with Charter over swaps, about 4 mln subs -source
* Adds fewer high-speed Internet customers than year ago (Adds details on Charter negotiations over divestitures, closing share price)
By Liana B. Baker
April 22 (Reuters) - Comcast Corp, the largest U.S. cable operator, posted higher first-quarter revenue and net income on Tuesday and showed it could add video subscribers for two quarters in a row, a rare occurrence in the cable industry.
The company, whose shares closed 2 percent higher, said it added 24,000 net video subscribers in the first quarter. That surprised analysts who expected a loss of 26,000 net subscribers, according to StreetAccount. Last year's fourth quarter marked Comcast's first upswing in cable video subscribers in more than six years.
Most cable companies have been shedding video subscribers for the past few years, losing them to satellite and telecom rivals as well as newer Web-based entrants such as Netflix Inc .
"Two straight quarters of basic video subscriber gains, even small ones, isn't enough to call a reversal of perennial losses," said MoffettNathanson analyst Craig Moffett in a research note. "But it's a start."
Comcast's high-speed Internet growth slowed in the quarter. It added 383,000 net subscribers, fewer than a year ago and missing estimates.
Comcast's Internet business was criticized by Netflix on Monday, capping months of tussling over the speed at which Comcast delivers the online streaming service to its cable customers.
Comcast, which made a $45.3 billion bid to acquire second-largest U.S. cable operator Time Warner Cable in February, said it had $17 million in costs related to the acquisition in the quarter.
It is waiting for approval from U.S. regulators on that deal. Time Warner Cable will release quarterly results on Thursday.
Comcast's chief financial officer, Michael Angelakis, said on Tuesday there is no timeline on when the company will make a decision regarding subscribers it has volunteered to divest as part of its takeover of Time Warner Cable.
The company is studying a "number of potential structures" and wants to pursue divestitures in the "most tax-efficient way possible," he told analysts on a conference call. Any cash proceeds from a spinoff or sale would be used for returning capital to shareholders, he said.
Comcast has not yet revealed what markets it is considering exiting but is in negotiations with Charter Communications Inc over a potential deal for under 4 million customers as well as a major swap of subscribers, according to a source familiar with the matter.
The source cautioned that the deal could fall apart at any time. Other cable companies and some unspecified private equity firms are still interested in the divestitures, added the person, who could not speak for attribution because terms of the potential deal were not public.
One of the potential structures Comcast is studying could be a two-phase process, where Charter acquires a portion of subscribers directly from Comcast, and then also takes a stake in a separate company that Comcast spins off, according to the source.
Comcast's free cash flow declined 10 percent in the quarter to $2.8 billion because of an increase in working capital related to the Olympics and TV and film production.
The Sochi Olympics, which aired in February, generated more than $1.1 billion in revenue in the quarter, Comcast said. This helped boost revenue at the NBC broadcast network by 73 percent to $2.6 billion.
Comcast reported net income of $1.87 billion, or 71 cents per share. Excluding items such as a sale of an investment in the quarter, EPS was 68 cents, which beat analysts' estimates by 4 cents.
Revenue rose 14 percent to $17.41 billion from $15.31 billion. Analysts on average expecting $17.04 billion.
Comcast shares rose 1.9 percent to close at $50.83 on the Nasdaq on Tuesday.
(Editing by Lisa Von Ahn, Sofina Mirza-Reid and Matthew Lewis)
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