Comcast Shares Rally to 52-Week High in Wake of 'Stellar' Fourth-Quarter Performance
The company's dividend hike and share repurchase program -- and the fact that it didn't lose too many cable TV subscribers -- has the stock rising on heavy volume.
Comcast shares rose 5 percent on higher-than-normal volume Wednesday as investors digested what one research firm called a “stellar” fourth-quarter report.
Comcast, which released its financial results prior to the opening bell, not only beat the profit and revenue estimates of analysts, it also boosted its dividend 44 percent to 65 cents per share. Also thrilling investors was the authorization of a $6.5 billion stock buy-back program, $3 billion of which should be completed this year.
Revenue at Comcast rose 3 percent to $15 billion and net income was also up 3 percent to $1.3 billion.
The company’s video-cable unit was getting lot of praise on Wall Street, as it shed just 17,000 subscribers, fewer than any quarter in the past five years. Some analysts, in fact, expected more like 140,000 defections. Meanwhile, the company added 336,000 broadband Internet subscribers.
Zacks Equity Research called the results “stellar,” adding that churn of video subscribers was “extremely low” and that “NBCUniversal has started providing synergies.”
The stock rose $1.27 to $28.52, surpassing a 52-week high.
NBCU contributed $5.7 billion in revenue during the quarter, up 1 percent from last year, with $2.2 billion coming from the cable networks (up 5 percent) and $1.8 billion from broadcast TV (down 4 percent).
Executives noted that, without the revenue generated by the 2010 Vancouver Olympics, revenue for broadcast TV would have shown a 5 percent increase year-over-year.
On a conference call with analysts, CEO Brian Roberts praised the shows The Voice and Smash, citing the latter as “one example of how well the company is working together… where, once again, we showed that NBC can promote its own shows on all of its platforms.” He noted that Smash generated 20 percent higher ratings in Comcast markets than it did elsewhere.
NBCU’s filmed entertainment unit contributed $1.3 billion in revenue (down 2 percent) and the theme parks added $498 million (up 4 percent).
The film unit benefited from the popularity of Fast Five and Bridesmaids, as well as a $305 million increase in licensing prior season and library TV content, presumably to the likes of Netflix, though executives didn’t clarify. Hurting results at the film segment were weak DVD sales.