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Comcast (CMCSA, CMCSK) Clinches Control of NBC Universal and Announces Big Income and Dividend Rises

By: , dated February 13th, 2013

Shares of Comcast Corporation (CMCSA: Charts, News), (CMCSK: Charts, News) were up 3.26 and 2.92 or +8.42 and +7.77 percent to $42.23 and $40.50 per share respectively in pre-market trading on Wednesday after the company said it had clinched a deal to finish buying NBC Universal Media, LLC for $16.7 billion from General Electric (GE: Charts, News). Comcast also said it will pay $1.4 billion to acquire the use of NBC’s floors at 30 Rockefeller Plaza in Manhattan, as well as CNBC’s New Jersey headquarters located in Englewood Cliffs. Daily Chart Comcast Corporation is based in Philadelphia, Pennsylvania and provides entertainment, communications and information services and products. The company is the largest cable operator in the United States. Comcast had previously bought 51 percent of NBC Universal from General Electric in January 2011. The cable company’s $16.7 billion acquisition of the final 49 percent share of NBC Universal from GE will be funded with $11.4 billion in cash, $4 billion in senior unsecured notes, $2 billion in credit, and $725 million in subsidiary preferred stock to be issued to GE. The U.S. Justice Department has already given antitrust approval for the purchase. In addition, Comcast released better than expected fourth quarter and annual earnings results for 2012, which included a 12 percent increase in consolidated revenue, 13.6 percent growth in operating income and a 22.2 percent rise in earnings per share to $1.93. The leading media and technology company also boosted its dividend by 20 percent to an annualized $0.78 per share, and announced a substantial stock buyback program of $2 billion that the company plans to complete in 2013. After the announcements, Comcast CEO Brian L. Roberts said that, “I am really pleased to report strong results for the 4th quarter and the full year of 2012 and delighted that we are able to accelerate the acquisition of General Electric’s 49% common equity interest in NBC Universal while also having the financial strength to return capital to shareholders. To underscore our confidence, we are increasing our dividend by 20% and plan to repurchase $2 billion of our stock this year.” Roberts went on to say that, “Our businesses have real momentum and we continue to benefit from our focus on operational excellence and to leverage all of our content and technology platforms to expand the entertainment choices we offer consumers. Cable’s fourth quarter and full year results demonstrate consistent improvement in customer metrics and growth in every product, led by High-Speed Internet. NBC Universal’s results principally highlight the improving performance of our broadcast businesses. Looking forward, CEO Roberts said that, “Our ongoing investments in programming, technology and new products are driving innovation and supporting this strong performance. As we begin 2013, our scale in distribution and content, combined with our focus on execution and innovation, provides many opportunities to continue to build value for our shareholders.” Despite the substantial pre-market price rise already seen on this news, Comcast’s stock may have more room to the upside over the coming months due to economies of scale resulting from the company’s enhanced integrated media approach. Comcast certain seems like a stock to watch in 2013. Other News About CMCSA Fox and Comcast Announce Comprehensive Programming Agreement A new agreement for Comcast to distribute Fox’s content using Xfinity TV. Comcast Corporation Releases New Corporate Logo and Updated Broadcast Quality B-Roll Comcast puts out a new corporate logo and updates its b-roll package. Other Stocks in the News Exclusive: Nvidia Plans 1 Million sq ft Santa Clara Campus Nvidia Corp. plans to expand its Santa Clara headquarters. Deere Announces Record First-Quarter Earnings of $650 Million Deere & Co shows record Q1 earnings, sees EPS rise 27%. Copyright 2013 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. 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Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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