Comcast Profit Edges Higher on Broadband, Business-Services Strength

By Shalini Ramachandran 

Comcast Corp.'s fourth-quarter profit edged up 0.6% thanks to growth in its broadband and business-services divisions, even as video customer additions slowed sharply and cable networks experienced advertising weakness.

Overall, Comcast reported a fourth-quarter profit of $1.93 billion, or 74 cents a share, slightly up from $1.91 billion, or 72 cents a share, a year earlier. Excluding certain gains and costs, adjusted profit per share for the latest quarter grew 16.7% to 77 cents a share. Revenue rose 4.8% to $17.73 billion.

Comcast also said it would increase its dividend 11% to $1 a share on an annualized basis and boost its stock-repurchase program to $10 billion. It said it would buy back $4.25 billion of shares in 2015, regardless of whether its pending $45 billion acquisition of Time Warner Cable Inc. closes.

The company added 6,000 video customers in the quarter, a sharp slowdown from the 46,000 it added a year ago.

Analysts surveyed by Thomson Reuters projected a per-share profit of 78 cents on $17.68 billion in revenue.

The latest results come as Comcast is facing tough scrutiny from regulators in Washington over its pending acquisition of Time Warner Cable. Cable investors also have been concerned about the potential impact of the Federal Communications Commission's proposal to regulate broadband service like a public utility.

Comcast's residential video revenue grew only 1.3% in the quarter, continuing a trend of slower growth as the company hasn't raised rates as sharply as before and it markets skinnier bundles of TV channels to customers.

Meanwhile, Comcast's subscriber growth in broadband and voice slowed. Comcast added 375,000 broadband subscribers, compared with 379,000 a year ago. Voice subscriber additions dropped to 123,000, from 227,000 in the prior-year period, driven by more customers opting for two-product bundles rather than the full "triple play." Comcast boosted its broadband revenue 9.9%, while voice revenue declined 1.4%. Business-services revenue jumped 20.8%.

Overall at the company's cable business, which accounts for the bulk of the top line, revenue increased 6.1% to $11.3 billion. Operating cash flow, a measure of profitability, rose 6.3% to $4.68 billion.

At Comcast's NBCUniversal entertainment arm, operating cash flow rose 6.6% to $1.43 billion, despite continued softness at its cable networks unit. Cable networks experienced a 5.6% decline in ad revenue to $857 million due to ratings weakness, a malaise that is continuing to drag down many television networks. Cable networks' operating cash flow declined 1.8% to $912 million.

The broadcast TV segment, home of the flagship NBC network, reported revenue growth of 4.8%, helped by strong ratings at NBC last year. Operating cash flow at the broadcast television unit grew to $230 million, from $140 million in the year-ago quarter.

The theme parks division experienced a 37.6% increase in operating cash flow to $352 million, thanks to the popularity of a new "Harry Potter" attraction at the Universal Orlando theme park.

Total revenue at NBCUniversal rose 2.3% to $6.62 billion.

Write to Shalini Ramachandran at [e-mail]

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