NBCUniversal First-Quarter Financials Rise Amid Profitable Sochi Olympics

NBCUniversal CEO Steve Burke

UPDATED: The Winter Games boosted TV ratings, revenue and profit at the entertainment company owned by cable giant Comcast, which reported its second quarterly video subscriber increase in a row.

Comcast on Tuesday reported improved first-quarter financials for its entertainment arm NBCUniversal, driven by what it said were profitable Winter Olympics in Sochi, Russia, and strong film results. The company didn't detail how much a profit the Olympics threw off.

The entertainment company, led by CEO Steve Burke, reported higher operating cash flow and revenue than in the same period last year. NBCUniversal aired the Winter Games on its broadcast and cable networks in the latest quarter, saying they generated more than $1.1 billion in revenue.

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Comcast, led by chairman and CEO Brian Roberts, also reported improved quarterly financials for its cable systems and its second quarterly increase in video subscribers in a row, of 24,000, after returning to growth mode in the fourth quarter. The company earlier this year agreed to acquire Time Warner Cable in a $45 billion deal.

NBCUniversal quarterly revenue rose 28.8 percent to $6.9 billion. Excluding the Olympics, revenue increased 8.1 percent. Operating cash flow jumped 37.6 percent to $1.3 billion.

For the first quarter, film unit revenue rose 11.1 percent to $1.4 billion driven by higher theatrical revenue from Ride Along and Lone Survivor, as well as The Wolf of Wall Street in international markets where the studio has the rights. Film unit operating cash flow increased from $69 million to $288 million amid the higher revenue and lower amortization of film costs.

Quarterly broadcast TV revenue rose 72.8 percent to $2.6 billion, including $846 million generated by the Sochi Olympics. Excluding that, revenue increased 17 percent amid higher advertising revenue and retransmission consent fees. Broadcast operating cash flow of $122 million meant a swing from a year-ago loss of $35 million. Higher revenue was partially offset by higher programming and production costs due to the Olympics.

Cable networks revenue jumped 12.6 percent to $2.5 billion in the first quarter, including $257 million in Sochi revenue. Excluding that, revenue edged up 1 percent amid a 1.4 percent drop in ad revenue. Cable operating cash flow of $895 million rose 5 percent as higher revenue was partially offset by higher programming and production costs due to the Olympics.

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Theme parks revenue increased 5.4 percent, but operating cash flow dropped 1.5 percent amid the increased cost of supporting new attractions.

Comcast overall exceeded Wall Street expectations with its first-quarter financials. Revenue grew 13.7 percent to $17.41 billion, or 6.5 percent excluding the Olympics. Operating cash flow rose 10 percent to $5.54 billion, and earnings rose from $1.44 billion to $1.87 billion.

"At NBCUniversal, we had another superb quarter with double-digit revenue and operating cash flow growth driven by the tremendously successful Sochi Olympics and the best season-to-date broadcast ratings in a decade," said Roberts. "Overall, the company is performing well and the more planning we do for our proposed merger with Time Warner Cable, the more excited we are by the opportunities for the combined company. Comcast has tremendous momentum right now, and we believe the TWC transaction will strengthen a truly world-class organization that will be well positioned to compete and yield meaningful benefits to our customers, employees and shareholders."

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai