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Comcast Profit Rises on Broadband Gains, NBC Universal Deal

Comcast's CEO
Brian Roberts, chairman and chief executive officer of Comcast Corp., speaks during a Samsung Electronics Co. presentation at the 2011 International Consumer Electronics Show in Las Vegas on Jan. 6, 2011. Photographer: Andrew Harrer/Bloomberg

May 3 (Bloomberg) -- Comcast Corp., the largest U.S. cable company, reported an increase in first-quarter revenue and profit with the addition of broadband subscribers and the completion of a deal for control of NBC Universal.

Net income was $943 million, or 34 cents a share, compared with $866 million, or 31 cents, a year earlier, the company said in a statement today. Revenue rose to $12.1 billion, from $9.2 billion a year ago, when it didn’t control NBC Universal.

Comcast, based in Philadelphia, added 639,000 new Internet, video and voice subscribers, an 8.3 percent increase from a year earlier. The company added 418,000 high-speed Internet subscribers and lost 39,000 video subscribers, less than the 123,000 loss projected by Matthew Harrigan, an analyst at Wunderlich Securities in Denver, Colorado.

“The video losses were a big improvement,” said Harrigan. “Overall subscribers was also a really good number.”

NBC Universal made up about 30 percent of Comcast’s revenue for the quarter. NBC’s revenue was $4.35 billion compared with $4.92 billion a year ago. Excluding the Olympics, which brought in $782 million in the first quarter of 2010, NBC revenue rose 5.2 percent. Revenue from Comcast’s cable assets was $9.08 billion, a 5.8 percent increase from a year ago.

Revenue from cable networks, including Bravo, CNBC and MSNBC, rose 13 percent to $2.02 billion. Ratings increased for all cable stations other than USA, said Tom Eagan, an analyst at Collins Stewart LLC in New York. Broadcast television revenue was $1.35 billion, down from $2.08 billion when results included the Olympics.

NBC Value

“Bondholders can take a lot of comfort in the results,” said Joel Levington, a managing director in New York at Brookfield Investment Management Inc., in an e-mail. “We believe that Comcast is very well positioned within its credit ratings.”

Comcast is rated Baa1 by Moody’s Investors Service and an equivalent BBB+ by Standard & Poor’s.

This is the first time Comcast has released a detailed outline of NBC’s financials. The market hasn’t correctly priced in the studio and network assets of NBC to the valuation of Comcast shares, according to Harrigan.

“When the deal was announced, I think a lot of analysts gave NBC-U a stale valuation,” said Harrigan. “I think it’s worth well north of $40 billion at this point.”

Comcast and General Electric Co. said the assets of NBC Universal were valued at $30 billion when the deal was announced on Dec. 3, 2009. Media companies have “significantly” increased in value since then, said Harrigan.

Comcast fell 7 cents to $26.61 at 4 p.m. in Nasdaq Stock Market trading. Shares have risen 21 percent this year.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net.

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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