Comcast Corp. (CMCSA), the largest U.S. cable company, climbed the most since 2010 after fourth-quarter profit rose more than analysts estimated and video-customer losses narrowed for the fifth straight period.
Comcast jumped 4.7 percent to $28.52 at the close in New York, the largest intraday increase since September 2010. Shares of the Philadelphia-based company have added 20 percent this year and are trading near a five-year high.
The company lost 17,000 video subscribers in the quarter, compared with 135,000 a year earlier. Analysts projected a drop of 127,000, according to 11 estimates compiled by Bloomberg. Comcast, facing competition from phone companies and Web-based rivals such as Netflix Inc. (NFLX), improved customer service and let users access more TV shows and movies on mobile devices, Neil Smit, head of Comcast Cable, said on a conference call.
“A return to positive video subscriber growth -- unthinkable in consensus numbers as recently as six months ago - - is now not only plausible, but arguably likely,” Craig Moffett, a Sanford C. Bernstein & Co. analyst in New York with an “outperform” rating on the stock, said in a note to clients. “That’s a huge change.”
The number of video customers lost was the smallest since the first quarter of 2007. Still, Smit said he doesn’t expect positive net video additions in the first quarter of 2012.
Last quarter, 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.
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. Analysts projected 42 cents a share on average.
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. Cable-network revenue increased 5.3 percent to $2.21 billion.
Comcast also authorized a $6.5 billion stock buyback and increased its annual dividend 44 percent to 65 cents a share.
The buyback is a sign the company is committed to give back to shareholders after Time Warner Cable Inc. (TWC), 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 with a “buy” rating on the stock.
Comcast said $3 billion of the new repurchase program will be made in 2012, up from $2.1 billion in last year.
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.
Comcast is excited by the potential of “Smash” and “The Voice” to help NBC ratings this year, according to Chief Financial Officer Michael Angelakis. Many of the shows on the 2011 fall schedule were brought in under previous NBC Universal management. Stephen Burke took over as head of NBC Universal in January 2011 along with NBC entertainment chief Robert Greenblatt.
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