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Comcast shares surge on $16.7 bln NBCUniversal deal, Q4 results tops views

Comcast shares surge on $16.7 bln NBCUniversal deal, Q4 results tops views

 

Telecommunications giant Comcast Corp. (NASDAQ:CMCSA) saw its shares jump Wednesday, after it announced it will acquire General Electric’s (NYSE:GE) 49-per-cent equity stake in the NBC Universal joint venture for about $16.7 billion. 

Shares moved up 6.34 per cent on the back of the news announced late Tuesday, trading at $41.44 as at about 10:15 a.m. EDT.

The deal will be funded with $11.4 billion of cash on hand, $4.0 billion of subsidiary senior unsecured notes to be issued to GE, $2.0 billion of borrowings under Comcast’s and/or its subsidiary bank credit facilities and $725 million of subsidiary preferred stock to be issued to GE, the company said.

The sale is expected to close by the end of the first quarter of this year.

“Our decision to acquire GE's ownership is driven by our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders,” said chairman and CEO Brian L. Roberts. 

“We believe the terms of the transaction are attractive and have planned for this event by taking a number of financial steps to prepare our balance sheet. We believe we are in a strong and unique position to continue to grow and build value in our combined company.”

Comcast said that NBCUniversal will also purchase from GE the properties at 30 Rockefeller Plaza and CNBC’s headquarters in Englewood Cliffs, New Jersey for roughly $1.4 billion. 

In other news, the company late Tuesday posted fourth quarter results that topped analyst views as profits and revenue rose, and increased its yearly dividend by 20 per cent.

For the quarter that ended December 31, the company said net earnings rose to $1.51 billion or 56 cents per share, compared to $1.28 billion or 47 cents per share, a year earlier. 

Revenue rose 5.9 per cent to $15.9 billion, from $15 billion in the year-ago quarter.

Analysts polled by Thomson Reuters expected a per-share profit of 50 cents, on $15.43 billion in sales.

The broadcaster’s cable communications unit posted $10.1 billion in sales, up seven per cent on growth in high-speed internet, business services and video. 

Advertising revenue increased 19.4 per cent, reflecting higher political advertising in the fourth quarter, Comcast said. 

High-speed internet customers rose to 19.3 million, up from 18.1 million, a year-earlier. Voice customers totalled 9.9 million, up from 9.3 million.

Revenue at NBCUniversal, a subsidiary of Comcast, increased 4.8 per cent to $6.01 billion in the fourth quarter, driven by strong results at the broadcast television unit.

Cable networks revenue edged up 0.6 per cent to $2.2 billion, reflecting an increase in distribution revenue that was negatively impacted by the NHL lockout, and a decrease in advertising revenue reflecting the impact of lower ratings, mostly offset by price increases. 

Revenue in the broadcast television division increased 7.9 per cent to $2.0 billion, driven by strong primetime ratings at the NBC broadcast network, as well as higher political advertising at the owned local stations, the company said. 

Its filmed entertainment segment revenue increased 9.0 per cent to $1.4 billion  

Comcast increased its dividend by 20 per cent to 78 cents per share on an annualized basis. A quarterly cash dividend of 19.5 cents a share is payable on April 24 to shareholders of record as of the close of business on April 3.

In addition, the company said that it plans to buy back $2.0 billion of its stock during 2013, subject to market conditions.

 

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