Comcast execs tout ad rebound

Laud NBC Uni deal timing; Q1 results beat estimates

NEW YORK -- Largest U.S. cable operator Comcast Corp. reported better-than-expected first-quarter results Wednesday on better subscriber and advertising momentum.

Comcast management on Wednesday morning's earnings call reiterated that they expect they can close the planned NBC Universal acquisition late this year and benefit from the rebound in the ad market.

"We're still hopeful later this year," chairman and CEO Brian Roberts said when asked about the timing. "It appears the advertising market has really turned around...and bodes well for the timing of the transaction." He also said retransmission consent deals that broadcast companies have recently struck bode well for NBC Uni.

Cable advertising finally showed improvement at Comcast, up 23.5% in the first quarter after a 2009 decline. This marked the first gain since the opening quarter of 2008.

And advertising has continued to strengthen into 2010, said COO Stephen Burke, who will oversee NBC Uni. He later also called current ad market trends "a real positive" and said the ad recovery seems to have "a lot of depth and breadth." Management cited returning strength in auto and other key ad categories.

Comcast posted a quarterly profit of $866 million, up 12% from $772 million in the year-ago period. The company also reported a 3.8% revenue gain to $9.2 billion. The figures exceeded Wall Street expectations.

The quarter included costs of $29 million (or $17 million net of tax) related to the planned acquisition of NBC Uni, made up of $14 million in operating expenses, $2 million in interest expense and $13 million of other expense.

In a sign that the regulatory process for the NBC Uni deal isn't distracting the company from its cable systems business, Comcast lost 82,000 video subscribers in the latest quarter, but added 399,000 broadband and 273,000 telephony users. Overall, it added 1 million revenue generating units, up 21.5% from the year-ago period.

Comcast's cable networks unit outperformed overall revenue growth with a first-quarter gain of 6.7% to $385 million.

"Our healthy operating and financial results for the first quarter mark a solid start to 2010," said Roberts.

Sanford C. Bernstein analyst Craig Moffett said the latest figures may be a positive for the stock after Comcast shares missed a recent cable stock rally due in part to concerns about the NBC Uni deal.

"The prospects for a better 2010 rest on estimate revisions...and first quarter results are a very good start," said Moffett.

On Wednesday morning's earnings call, Roberts also welcomed new cable division head Neil Smit, the former CEO of Charter Communications, to his first Comcast conference call. He lauded him for listening to customer calls on his first day, adding: "We think we have found our guy."

Smit, who will free up Burke to spend more time on NBC Uni, said he will focus on profitable revenue growth at the firm's cable systems.

At the end of the call, Roberts was asked about his expectations for 3D TV. "It's a big event strategy," he explained when and how he thinks consumers will want to watch 3D on their TV sets. Price premiums for 3D TV sets seem quite small, but people won't want to sit on their couches with 3D glasses for hours every day, he suggested. He described Comcast's 3D TV and PC offer for the recent Masters golf tournament as "very successful."

Speaking of 3D on the PC, Roberts also said 3D video gaming could be a big opportunity.
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