Comcast Authorizes $6.5 Billion Buyback
Comcast Corp. (CMCSA), the largest U.S. cable company, authorized a $6.5 billion buyback in stock after fourth-quarter profit rose more than analysts estimated and video-customer losses narrowed for the fifth straight period.
Net income increased 26 percent to $1.29 billion, or 47 cents a share, compared with $1.02 billion, or 36 cents, a year earlier, the Philadelphia-based company said in a statement. Analysts projected 42 cents a share on average.
The buyback is a sign the company is committed to give back to shareholders after Time Warner Cable Inc., the second-largest U.S. cable company, announced a $4 billion buyback plan last month, according to Vijay Jayant, an analyst at ISI Group in New York. Comcast said $3 billion of the new repurchase program will be made in 2012, up from $2.1 billion in last year.
“The key thing is return of capital,” said Jayant, who recommends buying the shares and anticipated $3 billion in buybacks for 2012. “The Time Warner Cable buyback a couple of weeks ago puts pressure on Comcast to respond in turn.”
Comcast shares advanced 6.9 percent to $29.14 in early trading. They had risen 15 percent this year before today.
Comcast also increased its annual dividend 44 percent to 65 cents a share. Jayant predicted a 20 percent gain.
The company lost 17,000 video subscribers in the quarter, compared with 135,000 a year earlier. Analysts forecast a decline of 127,000, according to 11 estimates compiled by Bloomberg.
The cable provider added 336,000 broadband customers, higher than the average analysts’ estimate of 279,000, and 146,000 phone subscribers, in line with projections.
Sales rose to $15 billion, a 3 percent increase on a pro forma basis, which assumes Comcast owned NBC Universal in the fourth quarter of 2010. Comcast’s acquisition of NBC Universal closed in January 2011.
Revenue at the NBC Universal unit climbed 0.8 percent. Broadcast television revenue from NBC was $1.84 billion, down 3.7 percent. NBC continues to languish in fourth place behind networks CBS, News Corp.’s Fox and Walt Disney Co.’s ABC. Broadcast advertising revenue fell 6.5 percent in the quarter to $1.26 billion.
“NBC gets an inordinate amount of large attention because it’s not Comcast’s most important business,” said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, who has an “outperform” rating on Comcast.
Cable-network revenue rose 5.3 percent to $2.21 billion.
(Comcast plans to hold a conference call at 8:30 a.m. New York time. To listen, visit http://www.cmcsk.com/.)
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