Yesterday, after the closing bell,
) reported its fourth-quarter 2012 financial results, which fell
below the Zacks Consensus Estimates. However, in the after market
trade on NASDAQ, the stock price of Comcast was up $2.78 (7.13%)
to $41.75. We believe there are three reasons for the share price
increase: (1) Despite missing the Zacks Consensus Estimates, the
year-over-year financial growth was strong, (2) The company's
decision to acquire the remaining 49% stake of NBC Universal from
General Electric Co.
) and (3) Significant hike in shareholders' wealth. Comcast
currently has a Zacks Rank #3 (Hold).
Fourth Quarter Results in Details
GAAP net income for the fourth quarter of 2012 was $1,518
million or 56 cents per share, compared with net income of $1,287
million or 47 cents per share in the prior-year quarter. However,
quarterly adjusted earnings per share of 52 cents were a penny
shy of the Zacks Consensus Estimate. Total revenue came in at
$15,937 million in the reported quarter, up 6% year over year,
but fell below the Zacks Consensus Estimate of $16,022
Quarterly operating costs and expenses were $10,660 million,
up 5.3% year over year. However, quarterly operating income was
$3,294 million, representing an annualized growth of 12.9%.
Operating margin, in the fourth quarter of 2012, was 20.7%
against 19.4% in the prior-year quarter. During the reported
quarter, Comcast repurchased 21.1 million of its common shares
for a consideration of $750million and paid dividends totaling
During the fourth quarter of 2012, Comcast generated $5,277
million of cash from operations compared with $4,916 million in
the year-ago quarter. Consolidated free cash flow in the reported
quarter was $1,832 million, compared with $1,876 million in the
prior-year quarter. Cash and cash equivalents, at the end of
2012, were $12,415 million compared with $1,674 million at the
end of 2011. Total debt at the end of 2012 was approximately
$40,458 million compared with $39,309 million at the end of 2011.
At the end of 2012, debt-to-capitalization ratio was 0.43
compared with 0.44 at the end of 2011.
Cable Communications Segment
Quarterly total revenue was $10,132 million, up 7% year over
year. Operating cash flow was $4,021 million, up 6.7% year over
year. Within this segment, Video revenue was $5,043 million, up
2.9% year over year. High-Speed Internet revenue was $2,438
million, up 8.7% year over year. Voice revenue was $895 million,
up 1.4% year over year. Advertising revenue was $652 million, up
19.4% year over year. Business Services revenue was $660 million,
up 32.4% year over year. Other revenue was $444 million, up 11.1%
year over year.
As of Dec 31, 2012, Comcast had 19.367 million (up 6.7% year
over year) High-Speed Internet customers; 9.955 million (up 6.6%
year over year) Voice customers; and 21.995 million (down 1.5%
year over year) Video customers. In the reported quarter, Comcast
lost a net total of just 7,000 video customers compared with a
net loss of 17,000 customers in the prior-year quarter. The
company added a net 341,000 High-Speed Internet customers
compared with 336,000 in the year-ago quarter. Similarly, Comcast
added a net total of 168,000 voice customers compared with
146,000 in the prior-year quarter. In the previous quarter,
monthly ARPU from video customers increased 8.7% to $153.54.
NBC Universal Segment
Quarterly total revenue was $6,014 million, up 4.8% year over
year. The segment's pro forma operating cash flow was $1,172
million, up 11.4% year over year. Within this segment, Cable
Networks revenue was $2,218 million, up 0.6% year over year.
Broadcast TV revenue was $1,986 million, up 7.9% year over year.
Alongside, Filmed Entertainment revenue was $1,381 million, up 9%
year over year. Theme Parks revenue was $520 million, up 4.5%
year over year.
In a major strategic move, Comcast decided to purchase the
remaining 49% stake of NBC Universal from General Electric for a
total consideration of $16.7 billion. Additionally, Comcast will
also buy GE Capital's properties at 30 Rockefeller Plaza in New
York City and CNBC's headquarters in Englewood Cliffs, N.J., for
about $1.4 billion. Comcast will utilize $11.4 billion of its
liquid cash to fund the deal together with issuing $4 billion of
senior unsecured notes to General Electric, $2 billion in credit
facility borrowings and issuing $725 million in subsidiary
preferred stock to General Electric. With NBC Universal in its
kitty, we believe that Comcast will become a major competitor to
The Walt Disney Co.
The board of directors of Comcast has decided to raise its
annual dividend payment rate by a whopping 20% from 65 cents per
share to 78 cents per share. In addition, the board also decided
to repurchase $2 billion worth of its own common share in
Yesterday, Comcast formed a deal with Fox Networks of
) to distribute Fox's programming to its Xfinity customers.
Xfinity is the TVEverywhere service of Comcast and consequently
its subscribers will be able to watch Fox Networks on TV, PC,
smartphones and tablets.
COMCAST CORP A (CMCSA): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis
NEWS CORP INC-A (NWSA): Free Stock Analysis
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