Comcast earnings soar; now the hard part begins
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Comcast Chief Executive Brian Roberts summed it up succinctly Wednesday morning: ‘Now it’s really all about execution.’
The Philadelphia cable company swallowed NBC Universal just three weeks ago, culminating years of ambition to become a world-class entertainment company, and a lengthy 13-month review process to secure the federal government’s approval. Now Comcast has it all: a healthy television distribution business, a growing high-speed Internet service and a collection of entertainment assets that includes the NBC broadcast network, Universal Pictures film studio, Universal theme parks, Spanish-language television Telemundo, sports networks including the Golf Channel, and some of the most profitable cable television channels on the planet, including USA Network, Syfy, Bravo, CNBC and MSNBC.
And, in the final quarter of 2010 -- its final period before adding NBC Universal to its mix, Comcast surpassed analysts’ estimates for its earnings. The company’s operating income grew rose 10.8% for the quarter. Revenue was up 7.2% to $9.72 billion.
Comcast also raised it annual dividend by 19% -- to the delight of investors. On Wall Street, investors bid higher for the company’s shares.
‘We’re beginning 2011 in a wonderful position,’ Roberts said.
Now the work begins. Despite all of the talk about the importance of fixing the ailing NBC broadcast network or the glamour of entering the movie business, Roberts said the first priority of his lieutenant, NBC Universal Chief Executive Steve Burke, would be ‘to maintain the strong momentum and focus of the cable channels.’
Cable channels, after all, provide 80% of the operating profit of NBC Universal.
And Comcast is, by definition, a cable company.
Burke indicated that he has his work cut out when it comes to the broadcast business. ‘There is big opportunity in the next few years for NBC.’ Perhaps in ‘three, four, five years,’ he said. While NBC News is strong, NBC’s prime-time lineup is weak. Sports properties lose hundreds of millions of dollars a year.
Burke cautioned that there won’t be any rapid turnarounds. ‘I don’t think that we are going to see anything for awhile,’ he said.
He also sprinkled a little cold water on some people’s expectations that NBC would bid aggressively to maintain its rights to broadcast the Olympics. Negotiations for the TV rights for the 2014 and 2016 Olympics are expected to begin in a few months, and NBC has long outdistanced its rivals. But last time around, in 2010, NBC lost more than $220 million on its broadcast of the Vancouver Olympics. Comcast doesn’t appear to be as willing to bid for the games at any cost.
‘We are here to make money,’ Burke said. ‘We’re here to be disciplined. Our job is to increase value over the long term.’
-- Meg James
