Comcast gung-ho with NBCU addition; raising dividend


NBC Universal wasn’t included in the Q4 results reported Wednesday by Comcast, since the acquisition didn’t close until January 28th, but executives of the cable MSO are expecting big things from the new business. Meanwhile, Comcast has been doing so well that it raised its dividend.

Q4 revenues increased 7.2% to $9.7 billion, while operating cash flow increased 9% to $3.7 billion. Comcast reported particularly strong growth in ad revenues for its cable networks, which are now being integrated into NBCU. Because that acquisition closed so recently, Comcast declined to provide financial guidance for 2011, telling analysts to wait until it reports Q1 results on May 4th.

Meanwhile, the company has increased its dividend by 19% to 45 cents annually, with the first quarterly payment of 11 and a quarter cents per share to be paid April 27th to shareholders of record on April 6th, which would include the NBCU employees who all received shares recently. Also, the authorized stock buyback has been increased to $2.1 billion in 2011.

While Comcast execs declined to address any financial questions regarding NBCU, CEO Brian Roberts gave a detailed answer regarding goals for the new operation in response to a question from Jessica Reif Cohen of Merrill Lynch/BofA. “One of the advantages of waiting 13 or 14 months to get a deal closed, due to regulatory approval, is you get a chance to really get to know the asset, really get to know the people, and get a chance to create a set of goals, plans and priorities for the future. We have a lot of big goals for NBC Universal. I would start with the fact that 80% of the EBITDA, or 80% of the value, are the cable channels. The cable channels are in fantastic shape and have been growing double-digits. There you want to just make sure that we continue to make the right investments and continue the growth,” Roberts said.

“The biggest opportunity, I think, over the next few years – and we certainly don’t expect to see anything in the next year – but if you go out three, four, five years, it’s the NBC Network, where we have some real strength in NBC News and some real weakness with primetime. And we think we can make progress and we’re doing a variety of things, putting a variety of things in place to get that progress back. I don’t think we’re going to see anything for a while,” the Comcast CEO said of the Peacock Network.

“We’re very excited about opportunities like Telemundo. You mentioned international – we think international is a real opportunity. So the assets are fantastic and the real core of the assets, the cable channels, are in great shape and we want to continue to keep that going. But we’re going to be opportunistic in terms of the places where we can invest and grow, like international, like Telemundo, like the NBC Network as well,” Roberts concluded.

Comcast execs were also asked about the company’s willingness to bid big to keep the Olympics and NFL contracts at NBCU. Roberts said there is a long-term opportunity to do things such as working together at the Golf Channel and NBC Sports “and bring it to another level where it’s never been before,” so that is where the focus is now, rather than on specific rights contracts. “We’re here to make money,” added new NBCU CEO Steve Burke, saying that his focus is on businesses that have good returns.

RBR-TVBR observation: The good news for folks at the NBC Network, Telemundo and the O&O stations is that Comcast is in great financial shape and these guys are talking about spending money to improve the NBCU products so they can make more money down the road.