Comcast Corp. (CMCSA:US), the largest U.S. cable company and the owner of NBCUniversal, reported a 26 percent increase in fourth-quarter profit after adding TV subscribers for the first time in more than six years.
Net income rose to $1.91 billion, or 72 cents a share, in the quarter, the Philadelphia-based company said today in a statement. Comcast also increased its dividend by 15 percent to 90 cents a year and authorized an additional $7.5 billion in share repurchases, with $3 billion planned for this year.
Comcast marked a turnaround in the period by adding 43,000 television subscribers, ending 26 straight quarters of declines. The company had been grappling with an industrywide slide in TV customers, caused by a sluggish economy and competing offerings from phone carriers like Verizon Communications Inc.
The results were “stronger than expected,” Todd Mitchell, an analyst with Brean Capital LLC, said in a note to clients following today’s report. Its unique digital service should help it continue to outperform other cable operators, he said.
Comcast shares climbed 1.6 percent to $53.35 at the close in New York. The stock rose 39 percent in 2013, its fourth straight year of gains.
Under Chief Executive Officer Brian Roberts, Comcast has invested in a new digital interface, called X1, that gives customers the ability to store and watch TV shows through an Internet server -- what’s known as a cloud-based system. The so-called TV Everywhere approach lets subscribers see programs on a range of devices, including tablets and phones. Comcast said it’s in talks to license the technology to other providers, including Cox Communications Inc., the third-largest cable company in the U.S.
“Our results highlight the momentum we have achieved and how we are benefiting from scale, our investment in innovative products, and from our focus on operational excellence,” Roberts said in the statement.
Comcast also is near a deal to buy cable systems in New York City, New England and North Carolina from Charter Communications Inc., if Charter succeeds in its takeover bid for Time Warner Cable Inc., people with knowledge of the matter said yesterday. An agreement would give Comcast an additional 3 million customers in those markets and could be valued at about $16 billion.
The asset sale would be contingent on Charter’s acquisition of Time Warner Cable, which still could fall through, said the people, who asked not to be named because the negotiations are private. Charter has offered $132.50 per share for Time Warner Cable, valuing the cable company at $37.4 billion excluding debt. Time Warner Cable has rejected the proposal, calling it “grossly inadequate.”
Fourth-quarter sales gained 6.2 percent to $16.9 billion, Comcast said today. Analysts had predicted (CMCSA:US) $16.6 billion on average, according to data compiled by Bloomberg. Its net income climbed from $1.52 billion, or 56 cents a share, in the year-earlier period.
In addition to video subscribers, Comcast added about 379,000 Internet customers and 227,000 phone-service users. The average revenue from TV subscribers rose 6.8 percent to $164 a month as they added more services.
NBCUniversal, which includes the NBC broadcast network, cable channels USA and MSNBC, and Universal film studios, generated a 7.5 percent increase in sales to $6.46 billion. NBC led the division’s gains, surging almost 12 percent to $2.23 billion on improved ratings. Advertising at the network rose 8.3 percent to $1.61 billion for the quarter.
Comcast acquired the remainder of NBCUniversal from General Electric Co. for $16.7 billion in March. On a conference call today, Roberts called that “the single most important decision for 2013.”
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