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Comcast Profit Climbs 18%; Boosts Dividend; To Buy Rest Of NBCUniversal

2/12/2013 7:12 PM ET

Comcast Corp (CMCSA: Quote, CMCSK) said Tuesday after the markets closed that its fourth quarter profit rose 18% from last year, helped by improving performance of its broadcast businesses and strong growth in its high-speed internet services.

The company also said that it has increased its dividend by 20% to $0.78 per share on an annualized basis. Accordingly, the company declared a quarterly cash dividend of $0.195 per share, payable on April 24 to shareholders of record on April 3.

Additionally, the company said that it plans to repurchase $2.0 billion of its stock this year.

Separately, Comcast said that it will acquire General Electric Co.'s (GE: Quote) entire 49% equity stake in the NBCUniversal joint venture for about $16.7 billion, taking full control of the media company much earlier than expected.

Also under the agreement, NBCUniversal will buy from GE the properties used by it at 30 Rockefeller Plaza and CNBC's headquarters in Englewood Cliffs, New Jersey for about $1.4 billion.

The deal, which is expected to close by the end of the first quarter of this year, accelerates GE's divestiture ahead of a redemption period that would have begun in July 2014.

The deals will be funded with $11.4 billion of cash on hand, $4.0 billion of subsidiary senior unsecured notes to be issued to GE, $2.0 billion of borrowings under Comcast and/or subsidiary bank credit facilities and $725 million of subsidiary preferred stock to be issued to GE.

Comcast had acquired a 51% stake NBCUniversal, which owns the NBC broadcast network, movie studio Universal Pictures and pay TV network CNBC, from GE in January 2011.

Brian Roberts, Chairman and Chief Executive Officer of Comcast, said, "I am really pleased to report strong results for the 4th quarter and the full year of 2012 and delighted that we are able to accelerate the acquisition of General Electric's 49% common equity interest in NBCUniversal while also having the financial strength to return capital to shareholders."

Comcast's class A shares are currently gaining 6.21% in after hours trading after closing the day's regular trading session at $38.97, up 33 cents. The shares trade in a 52-week range of $26.93 to $40.28.

GE said it expects the pre-tax gain from the sale of its remaining NBCUniversal stake of about $1 billion to be offset by restructuring in 2013.

"This transaction allows us to significantly increase the cash we plan to return to shareholders in 2013, to approximately $18 billion, and to continue to invest in our industrial business," said GE Chairman and CEO Jeff Immelt.

GE said its board has increased the company's share repurchase authority to $35 billion, with about $23 billion of authorization remaining as of today. GE plans to accelerate its share repurchase program to about $10 billion in 2013.

GE shares are currently gaining 3.41% in after hours trading after closing the day's regular trading session at $22.58, up 13 cents. The shares trade in a 52-week range of $18.02 to $23.18.

For the fourth quarter ended December 31, 2012, Philadelphia, Pennsylvania-based Comcast reported net income of $1.5 billion or $0.56 per share, compared to $1.3 billion or $0.47 per share for the year-ago quarter.

Excluding a favorable tax adjustment due to changes in state tax legislation, earnings for the latest quarter were $0.52 per share.

On average, 28 analysts polled by Thomson Reuters expected the company to earn $0.53 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Revenue for the fourth quarter rose 6% to $15.94 billion from $15.04 billion in the same quarter last year. Twenty-six analysts had a consensus revenue estimate of $16.00 billion for the fourth quarter.

Cable Communications revenue for the fourth quarter rose 7% to $10.1 billion, driven by growth in high-speed internet, business services and video. Fourth quarter advertising revenue increased 19.4%, reflecting higher political advertising in the quarter.

Monthly average total revenue per video customer increased 8.7% to $153.54, reflecting an increasing number of residential customers taking multiple products, rate adjustments and a higher contribution from business services.

Combined video, high-speed internet and voice customers increased by 503,000 in the fourth quarter, an 8.0% increase compared to prior year fourth quarter net additions.

As of December 31, video, high-speed internet and voice customers totaled 51.3 million, a net increase of 1.5 million or 3.0% year-over-year, reflecting increased high-speed internet customer additions and reduced video customer losses.

Comcast started consolidating NBCUniversal results from January 28, 2011. The unit's revenue grew 4.8% to $6.0 billion in the fourth quarter, driven by strong growth at broadcast television and filmed entertainment.

During the fourth quarter, the company repurchased 21.1 million of its common shares for $750 million, taking the full year total to 95.7 million shares, or 3.5% of its common shares, repurchased for $3.0 billion.

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by RTT Staff Writer

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