UPDATED: Comcast Trades Up On Strong Quarter, Dividend Boost
Cabler Cuts Subscriber Losses, Hikes Cash Dividend 44%, Sees Shares Trade Up
by Mike Farrell -- Multichannel News, 2/15/2012 11:48:50 AM
Comcast traded up Wednesday, gaining nearly 5% on the day behind stronger-than-expected earnings and a 44% increase to the quarterly dividend.
Comcast shares soared even higher early on Wednesday, hitting $29.05 (up, 6.6% or $1.80) after reporting strong fourth quarter results.
Comcast closed at $28.52, up $1.27 (4.7%).
Comcast significantly pared its basic video customers losses in the period, to 17,000 from 135,000 n the same period in 2010.
That performance soundly beat analyst expectations. Consensus estimates were for losses in the 120,000-range. That raised the prospect that, with improving housing starts, the day of video customer growth might not be that far off.
"... 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," Sanford Bernstein cable and satellite analyst Craig Moffett wrote in a research note.
"That's a HUGE change."
On the quarterly earnings call, Comcast Cable division president Neil Smit said that he did not expect positive video customer growth in the first quarter of 2012 but said losses are expected to continue to decline.
He credited Comcast's fourth quarter performance to superior product offerings, strong execution by field operations teams and a slowdown in the rollout of telco video service.
Smit estimated that telcos rolled out video to 1.1 million new homes in the Comcast footprint in 2011, versus 2.5 million homes during in 2010.
Comcast also said it was stepping up the rollout of the X1 Platform, formerly known as Xcalibur, a suite of services including a Web-connected interactive guide.
Comcast's performance also had a positive effect on other MSOs in the sector. Charter Communications shares were up 2.6% ($1.58 each) to $61.60; Cablevision Systems rose 2% (29 cents) to $14.84; and Time Warner Cable increased 2.1% ($1.62 each) to $77.54 in early trading Wednesday.
Charter closed at $62.22, up 3.7%; Cablevision closed at $14.87, up 2.2%; Time Warner Cable closed at $76.83, up 1.2%.
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