Comcast Quiet On NBCU Front

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While not directly addressing the latest elephant in the room during its third-quarter conference call with analysts, Comcast's results for the period offered some explanation why the nation's largest cable operator is pursuing a deal with one of the country's largest content providers - programming is where the growth is.
Although accounting for a fraction of overall revenue and cash flow, programming networks like E! Entertainment, Golf Channel, Style and G4, reported double-digit revenue and operating cash flow growth in the period, while cable operations grew in the low single digits.

Comcast chairman and CEO Brian Roberts hinted at the cable company's negotiations with NBC Universal -- said to be nearing the home stretch -- without actually naming names on a conference call with analysts Wednesday morning.

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"Let me note the many media reports in the marketplace about a potential content investment by Comcast," Roberts said to open up the conference call. "While we can't comment on rumors, I'd like to reinforce that we will only look at opportunities in our core businesses that potentially can accelerate growth, make those businesses more profitable and differentiated and give them the benefits of scale. Our entire management team has united in this commitment and effort. Finally, I'd like to emphasize that we will continue to have a very disciplined approach as we evaluate any of these opportunities with our primary focus to create meaningful value for our shareholders."

Later, chief financial officer Michael Angelakis took a few minutes to not speak about NBCU.
"Obviously I cannot comment on any rumors and speculation, but believe it is important to reiterate our parameters," Angelakis said of Comcast's capital allocation strategy regarding acquisitions and external investments. "We have been clear that we will remain disciplined and ensure that any investment pass through our strategic and risk adjusted financial filters. Any investment has to reinforce our competitive advantages and also generate attractive financial returns for our shareholders. In addition to these filters, we have articulated we will preserve our financial strength, we will not use our stock at these levels and we will continue to return capital to our shareholders through both dividends and share buybacks."
For the period ended Sept. 30, overall revenue increase 3% to $8.8 billion and operating cash flow rose 2.7% to $3.3 billion. On the cable systems side, Comcast lost 132,000 basic video customers (in line with analysts' expectations), while high-speed Internet and telephony customers rose by 361,000 and 375,000, respectively. On the financial side, cable revenue was up 2.8% to $8.35 billion and operating cash flow increased 2% to $3.3 billion.
But the real growth was in its programming networks. For the period, Comcast's cable channels, including E! Entertainment, Golf, Style and G4, reported revenue growth of 10.3% to $383 million and operating cash flow growth of 12.5% to $118 million.

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