Comcast Stock Soars8/01/2012 6:54 AM Eastern
Strong second quarter results and better than expected ratings for the XXX Olympic Games helped drive Comcast shares up more than 4% ($1.45 each) in early trading Wednesday.
Comcast stock rose as high as $34 per share Wednesday, up $1.45 each or 4.5%. The shares closed Aug. 1 at $33.55, up $1 each or 3%.
Comcast reported better than expected results at its cable operations - basic video losses at 176,000 for the quarter came in well under analysts' consensus estimates. It was the seventh consecutive quarter of basic subscriber improvement at the nation's largest MSO. But the bulk of the rise in the stock price was likely more due to Comcast's expectations that the London Olympics, once anticipated to lose between $100 million and $200 million over the 17 days of the contest, could now near the break-even point for the content side of the business.
NBC Universal CEO Steve Burke said that the content giant is already $100 million above its advertising sales goal for the London Games and that with ratings well above forecasts, the games could end closer to the break-even point than the previously anticipated loss of $200 million.
Burke said that NBCU had predicted ratings for the London Games would be as much as 20% lower than the 2008 Games in Beijing, when U.S. swimmer Michael Phelps was pursuing eight gold medals. Instead, in its first five days the London Games are 9% above the Beijing contests at the same point and 26% above the 2004 Games in Athens. Overall, the ratings so far for the London Games are 30% above NBCU's original estimates.
Burke attributed the gains to NBCU's unprecedented coverage of the games, which includes the broadcast network, cable channels CNBC, MSNBC, Bravo and NBC Sports and online. In total, NBCU is offering 5,535 hours of coverage over the span of the Games.
"We think that is because of the way we promoted the [Games] during the 100 days leading up to the Olympics. We think that is due to all the efforts inside NBC Universal and things we've done with Comcast Cable. We think for the first time we have strategy that embraces broadcast, cable and digital, so we have a lot of exposure all leading up to these great numbers at prime time," Burke said on a conference call with analysts to discuss second quarter results. He added that the success of the London Games makes NBCU optimistic that it could make money on future Olympics.
"Given the trends we stand a chance to make money on future Olympics," Burke said. "I think we made one of the biggest bets we've ever made in terms of the rights deal we did for the Olympics a little over a year ago. We feel very good because all of the numbers are significantly better than we projected in our deal."
He added that the strong gratings at the NBC Sports cable channel also could translate into better value for that network,
"I think we feel great about what London is showing us the Olympics are capable of doing." Burke said. "Long term we are delighted to have the asset."
NBCU signed a $4.4 billion deal in 2011 for rights to the 2014, 2016, 2018 and 2020 Games.