Bloomberg News

Comcast Profit Surges After NBC Comeback, Asset Sales

October 26, 2012

Comcast Corp. (CMCSA:US), the largest U.S. cable company and the majority owner of NBC, said third-quarter profit more than doubled, boosted by advertising revenue, the sale of assets and fewer subscriber losses.

Net income climbed to $2.11 billion, or 78 cents a share, from $908 million, or 33 cents, a year earlier, the company said today in a statement. Excluding some one-time gains, profit was 46 cents a share, in line with the average analyst estimate compiled by Bloomberg. Sales rose 15 percent to $16.5 billion, beating the average estimate of $16.1 billion.

Comcast has upgraded its video services and broadband speeds and produced ratings gains at the once-struggling NBC, which drew more viewers age 18 to 49 in the first few weeks of the new season. A revival of the network would help Chairman and Chief Executive Officer Brian Roberts capitalize on his $13.8 billion gamble on NBC Universal.

“Their operations are solid,” said Todd Mitchell, an analyst at Brean Capital LLC in New York who recommends buying the shares.

Comcast’s stock rose 3.3 percent to $37.56 in New York at the close, the biggest one-day gain in more than eight months. Shares of the Philadelphia-based company have climbed 58 percent this year.

Olympic Advertising

NBC’s rights to televise the London Olympics in the U.S. helped the broadcaster double its ad revenue in the quarter to almost $2 billion. Comcast also is benefiting from the sale of assets, such as a stake in A&E Networks that it agreed to sell for $3.03 billion. That deal added 12 cents a share to earnings in the quarter, Comcast said.

A sale of wireless spectrum to Verizon Wireless generated 20 cents a share in the period. In that transaction, Verizon agreed to pay $3.6 billion for airwaves from a group of cable companies led by Comcast. The deal won government clearance in August.

Comcast repurchased $750 million of its own shares in the quarter and paid out $435 million in dividends.

The company lost 117,000 video subscribers in the period, less than the 165,000 that left the cable company a year earlier. Analysts had estimated a loss of about 124,000 on average. Comcast also added 287,000 broadband customers and 123,000 phone customers. Analysts had projected a gain of 264,000 Internet subscribers and 120,000 phone customers.

Online Video

While Comcast has stemmed losses in cable-TV subscribers, the emergence of streaming Internet video also is an important opportunity for the company, NBC Universal CEO Stephen Burke said on an conference call with analysts. Comcast will look for new ways to make money from those kinds of services, he said.

“It’s clearly something you need to pay attention to,” Burke said.

Revenue at NBC Universal rose 31 percent to $6.82 billion. In addition to the Olympics boost, films such as “The Bourne Legacy” and “Ted” increased box-office sales for the business’s movie-studio division.

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • CMCSA
    (Comcast Corp)
    • $57.17 USD
    • 0.88
    • 1.54%
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