NBCUniversal's Financials Gave No Hint of Shake-up

5:28 PM PST 09/09/2013 by Paul Bond
Angela Weiss/Getty Images
Brian Roberts

"NBCUniversal has real momentum," Comcast CEO Brian Roberts said while reporting the company's quarterly growth in July, but he offered no discussion of the film unit in a chat with analysts.

A management shake-up at NBC Universal comes at an unusual time — right after a quarter where the unit, which incudes TV networks, filmed entertainment and theme parks, outperformed the parent company's other assets, which are made up primarily of Internet and cable television subscription services.

In the second quarter, NBCU recorded 8.9 percent revenue growth to $6 billion and a 21.3 percent spike in operating cash flow to $1.2 billion. At Comcast's "cable communications" business, though, growth was more modest, with revenue up 5.8 percent to $10.5 billion and operating cash flow up 5.7 percent to $4.3 billion.

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At the film studio — where Jeff Shell will be named chairman of Universal Filmed Entertainment, while Universal Studios chairman Adam Fogelson will leave the company — the difference is even more strikingly positive. In the most recent quarter, filmed entertainment's revenue grew 12.8 percent and negative operating cash flow of $83 million was turned into a positive $33 million. The box-office performance of Fast & Furious 6 was credited with the strong results — along with home entertainment sales of Les Miserables.

When Comcast reported its quarterly results July 31, it boasted that, at NBCUniversal, "cable networks and film drive growth."

And at the time, Comcast CEO Brian Roberts gave no hints that there were problems in the executive ranks of NBCU, or that significant management changes were being considered.

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"NBCUniversal has real momentum, with solid growth in revenue and double-digit cash-flow growth," Roberts said at the time. "We have a fantastic combination of cable and content businesses with many opportunities ahead."

That being said, during a conference call with analysts after the earnings were released, there was almost no discussion of the film unit, and probably for good reason, given that it contributed less than 1 percent to Comcast's $3.44 billion in operating income in the most recent quarter.

The new management, no doubt, is looking for a bit more financial relevancy than that.

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