Comcast CEO Touts NBC Turnaround, Talks M&A Outlook After Failed Time Warner Cable Deal
Brian Roberts says the NBCUniversal broadcast TV unit's improved trends have "really taken hold."
Comcast chairman and CEO Brian Roberts and NBCUniversal CEO Steve Burke fielded questions on Monday about the companies' outlooks, with the former also discussing the cable giant's interest in deals following the its failed attempt to acquire Time Warner Cable.
Roberts lauded the NBC broadcast unit for its financial turnaround. The executives spoke on Comcast's first-quarter earnings conference call.
Roberts said he wanted to start off his prepared remarks with two non-earnings issues. He lauded late former Comcast CFO Larry Smith as having helped Comcast grow and contribute much to the company's hometown. "He meant so much to Philadelphia," he said. Roberts then turned his attention to the failed TW Cable bid: "We were excited" about the deal and bringing its services to more cities, he said, adding that "the government ultimately didn't see it the same way."
He added that the company kept its focus on executing its business plans during the regulatory review, and reiterated that the deal was structured in a way to avoid negative fallout for investors in the case it wouldn't go through. "As you can see in the first quarter, we are off to a terrific start in 2015, with very strong progress at both cable and NBCUniversal," Roberts said.
In a Q&A, Roberts was asked about Comcast's key focus areas and interest in further M&A opportunities. He said: "Of course we are disappointed, but it was a unique, one-off" opportunity to buy TW Cable. "We have moved on." Roberts added that improving the experience for Comcast subscribers continually is his team's core focus. "We have a very special company," he said, adding the company has always been open-minded to deals, but signaled it was for now focusing on its current businesses.
Asked later if any cable system swaps with Charter-Time Warner Cable could make sense if they reach a deal, he said: "Right now, we are not focused on either of those two scenarious." He added: "We don't have any conversations in that regard."
Asked about possible international M&A opportunities for NBCUniversal following the failed Time Warner Cable takeover, Roberts said: "We don't even have any new news or new focus today," he said. He mentioned that growth abroad at NBCUniversal has been "strong" and has helped the overall company, but emphasized that "our number one focus is the kind of results we posted...and staying focused, not taking our eye off the ball."
Roberts added that CFO Michael Angelakis' new investment company "is going to have an opportunity to look at things from all over the world."
Roberts also lauded the "excellent results" and "great growth" at NBCUniversal in his prepared remarks. "We are excited about the progress we have made in broadcast," he said about NBC, citing the strong Super Bowl ratings, The Voice and SNL's 40th anniversary special. "The turnaround has really taken hold and we have sustained the momentum as NBC remains number 1 in primetime for key demos," he said.
"Film turned in a terrific" quarter, Roberts added, also lauding the second-quarter performance of Furious 7.
Burke during the Q&A predicted that the theme parks unit would report operating cash flow of $1.3 billion-plus this year. "We see many, many years ahead of us in growth," he said.
Burke also signaled that while other entertainment gaints have laid off people and restructured their cable networks units amid industry challenges, NBCUniversal wouldn't need to follow suit, as it has previously rearranged its operations to set them up for the future.
First-quarter box-office revenue at NBCU was down only 1.3 percent percent despite fewer titles, amid the strength of Fifty Shades, management said. Burke touted the strong Furious 7 box office in the current quarter, saying it has reached $1.4 billion. Asked about foreign currency woes, Burke said though that this "would be pretty significantly higher if the dollar wasn’t so strong."