By Liana B. Baker
Jan 28 Comcast Corp on Tuesday
reported that it added more video subscribers than expected in
the fourth quarter and beat cash flow estimates at its NBC
Universal media unit, sending shares up more than 1 percent.
Comcast, the largest U.S. cable provider, said it added
cable video subscribers for the first time in more than six
years, helping to more than offset a slight miss in quarterly
profit. The 43,000 new video subscribers topped estimates of a
gain of 1,600 customers, according to StreetAccount. In the
third quarter, it lost 129,000 video subscribers.
"Comcast's return to positive video subscriber growth, even
if it is only for a single quarter, is an unmistakable sign that
their days of losing share to satellite are almost over," said
MoffettNathanson Research analyst Craig Moffett, referring to
rivals DirecTV and Dish Network Corp.
Executives said its cloud-based "X1" video operating system
as well as an increase in subscribers buying "triple-play"
packages of Internet, cable and phone helped retain customers in
Comcast increased its dividend by 15 percent to 90 cents per
share annually, authorized a new $7.5 billion stock repurchase
program and said it would buy back $3 billion in stock this
NBC Universal's operating cash flow rose 14.3 percent to
$1.34 billion, topping analysts' estimates of $1.21 billion.
"The reason why the stock is up is that NBCU is doing much
better than what people are expecting, in terms of advertising,
broadcast and at its cable networks," Macquarie analyst Amy Yong
While the quarterly subscriber numbers were a highlight,
Comcast Cable Chief Executive Officer Neil Smit said it would be
a while before the company added video customers on a full-year
The company said programming expenses would rise 9 percent
to 10 percent in 2014, compared with a year ago as it grappled
with higher fees charged by broadcasters and sports networks.
Comcast will offset the costs by raising cable prices, Comcast
Chief Financial Officer Michael Angelakis said.
The company said capital expenditures will increase to 14
percent of cable revenue as it invests more in the "X1" system
and expands services like Internet and phone to businesses.
Smit, the cable executive, confirmed that Comcast had
partnered with Cox, the third-largest cable operator, to license
its X1 platform and was working with Cox to find ways to tap the
product. Talks between the two was first reported by Reuters
ADDS 397,000 INTERNET CUSTOMERS
The company is considering boosting its cable subscriber
base on the U.S. East Coast and has been in talks with Charter
Communications Inc to carve up Time Warner Cable's
cable systems, a source has told Reuters.
But executives avoided any mention of its cable
consolidation strategy on Tuesday.
Free cash flow fell 22 percent to $1.4 billion in the
quarter, compared with a year ago, due to higher capital
expenditures and working capital.
Comcast added 397,000 high-speed Internet customers, topping
estimates of a gain of 350,000 customers.
Comcast recorded fourth-quarter net income of $1.91 billion,
or 72 cents a share, compared with $1.52 billion, or 56 cents
per share, a year ago.
Adjusted for a tax gain, the company's earnings per share
were 66 cents per share, which missed analysts' estimates by 2
Revenue rose 6 percent to $16.92 billion, above estimates of
$16.625 billion, according to Thomson Reuters I/B/E/S.
Shares advanced 1.2 percent to $53.13.