Reduced NBCUniversal Stake Affects General Electric's Third-Quarter Financials

4:50 AM PDT 10/21/2011 by Georg Szalai

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UPDATED: GE said its bottom line got a $131 million boost from a higher final valuation of its 49 percent stake in the entertainment company as cable giant Comcast, which acquired a 51 percent stake earlier this year, will report NBCUniversal's quarterly results later this earnings season.

NEW YORK - General Electric said on Friday said that its third-quarter revenue was unchanged compared to the same period a year ago at $35.4 billion.

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However, when excluding NBCUniversal revenue that GE accounted for in the current and year-ago period, the industrial conglomerate reported a 12 percent improvement. That is because the company reduced its stake in the entertainment company in a deal with cable giant Comcast in January from 80 percent to 49 percent.

In the third quarter of 2010, GE consolidated NBCUniversal's full $4.07 billion in revenue, while in the latest period, it mentioned $394 million in "NBCUniversal-related" revenue following the transfer of the company's assets to a joint venture with Comcast.

"Consolidated revenues include revenues from NBCU operations prior to this transfer as well as the transaction related gain," GE said. "We have provided the percentage of revenue growth excluding the impact of NBCU, as the volatility related to NBCU revenues can obscure underlying trends."

As was the case in the second quarter, the latest earnings report didn't detail NBCUniversal's actual results for the third quarter, but simply some figures about how GE is accounting for its financials.

Officials have previously said that the information reported by GE doesn’t allow direct conclusions about the entertainment company’s financial performance, which Comcast will once again detail in its quarterly earnings report on Nov. 2.

In terms of the bottom line, GE reported "corporate items and eliminations" that together amounted to a profit of $816 million in the second quarter. A contribution from NBCUni results is included in that figure, but GE didn't detail that contribution.

GE CFO and vice chairman Keith Sherin said though that GE's third-quarter earnings were boosted by 1 cent per share, or $131 million after-tax, from a final and higher valuation by outside appraisers' of GE's 49 percent stake in NBCUni following the Comcast deal in the first quarter.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai