Comcast Q4 Profit Rises, But Misses View; Boosts Dividend, Share Buyback

(RTTNews) - Cable television giant Comcast Corp. (CMCSA, CMCSK) on Tuesday reported a 1 percent increase in profit for the fourth quarter from last year, reflecting double-digit revenue growth in its high-speed Internet and business services units.

Adjusted earnings per share for the quarter missed analysts' expectations, while revenues beat their estimates. The company raised its annual dividend by 11 percent and also increased its share repurchase authorization to $10 billion.

Comcast agreed in February 2014 to acquire Time Warner Cable Inc. (TWC) in a $45.2 billion all-stock friendly merger deal. Time Warner Cable was to merge with and into a 100 percent owned subsidiary of Comcast. However, the merger of the two largest cable TV operators in the U.S. is still in a regulatory limbo, even after a year of the companies agreeing to a merger.

The Philadelphia, Pennsylvania-based company reported net income for the fourth quarter of $1.93 billion or $0.74 per share, up from $1.91 billion or $0.72 per share in the prior-year quarter. The latest quarter's results include costs related to Time Warner Cable and Charter transactions of $63 million or $0.03 per share.

Excluding transaction-related costs and income tax adjustments, adjusted earnings for the latest quarter were $0.77 per share, compared to $0.66 per share in the same period last year.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.78 per share for the quarter. Analysts' estimates typically exclude special items.

Consolidated revenues for the quarter increased 5 percent to $17.73 billion from $16.93 billion in the same quarter last year, but beat analysts' consensus estimate of $17.68 billion.

Cable Communications revenues improved 6 percent to $11.31 billion, reflecting increases of 10 percent in high-speed Internet, 21 percent in business services and 1 percent in video. Advertising revenue grew 19 percent, while voice revenue declined 1 percent from last year.

The company's customer relationships in the quarter increased by 178,000 to 27.04 million, a 47 percent improvement compared to an increase of 121,000 in the year-ago period.

Revenue for NBCUniversal rose 2 percent from the prior-year period to $6.62 billion, reflecting increases in broadcast television and theme parks, partly offset by a decline in theatrical revenue in filmed entertainment due to lower home entertainment revenue.

Revenue from cable networks edged up 0.1 percent to $2.33 billion, reflecting a 6 percent decline in advertising revenue along with a slight increase in operating costs driven by investment in programming. These more than offset a 5 percent increase in distribution revenue.

Revenue from broadcast television increased 5 percent from last year to $2.34 billion, driven by a 3.1 percent increase in advertising revenue, as well as higher retransmission consent fees.

Filmed entertainment revenues decreased 11 percent from the year-ago period to $1.30 billion, and revenue from theme parks increased 30 percent to $735 million.

For fiscal 2014, net income attributable to Comcast was $8.38 billion or $3.20 per share, up from $6.82 billion or $2.56 per share in the previous year. Adjusted earnings for the year were $2.93 per share, compared to $2.47 per share in the prior year.

Revenue for the year grew 6 percent to $68.78 billion from $64.66 billion last year.

Street expected the company to earn $3.23 per share for the year on revenues of $68.74 billion.

In addition, Comcast's board increased its stock buyback program to $10 billion. At this time, the company plans to repurchase $4.25 billion of shares during 2015.

The company noted that additional share repurchases above the $4.25 billion plan in 2015 will be determined by the closing of the Time Warner Cable merger and the subsequent divestiture transactions.

Further, the company said it increased its dividend by 11.1 percent to $1.00 per share on an annualized basis.

In accordance with the increase, the board declared a quarterly cash dividend of $0.25 per common share, payable on April 22, 2015 to shareholders of record as of the close of business on April 1, 2015.

CMCSA closed Monday's trading at $58.21. In Tuesday's pre-market activity, the stock is up $0.11 or 0.19 percent to $58.32.