February 13, 2013 in Business

Comcast finishes deal

GE sells remaining stake in NBCUniversal early
Ryan Nakashima Associated Press
 
Earnings on rise

Comcast also posted its earnings results a day early Tuesday, saying earnings rose 18 percent to $1.52 billion, or 56 cents per share, in the quarter through December. Excluding a favorable income tax adjustment, adjusted earnings came to 52 cents per share, falling short of the 54 cents per share expected by analysts polled by FactSet. Revenue rose 6 percent to $15.94 billion, also slightly below the $16.01 billion analysts were expecting.

LOS ANGELES – Comcast said Tuesday that it’s buying the rest of NBCUniversal from General Electric for $16.7 billion, doing so several years early as the cable TV provider takes advantage of low borrowing costs and what CEO Brian Roberts called a “very attractive price.”

At the same time, Comcast Corp. raised its annual dividend 20 percent to 78 cents per share and vowed to buy back $2 billion in shares this year. It is also buying NBCUniversal’s headquarters at 30 Rockefeller Plaza in New York and the CNBC headquarters in Englewood Cliffs, N.J., for another $1.4 billion.

Investors thought the move was good for both companies – GE because it got cash for its stake earlier than expected and Comcast because it will benefit more from the rising price of rights to sports and other TV programs. With the NBCUniversal businesses, Comcast avoids solely being in the uncomfortable position of passing those costs on to consumers.

Comcast’s stock jumped $2.53, or 6.4 percent, to $41.46 in after-hours trading, following the announcement. GE shares rose 81 cents, or 3.6 percent, to $23.39.

Comcast is the nation’s largest cable TV operator, a business that generates nearly two-thirds of its revenue. The NBCUniversal business makes up the rest and includes the NBC and Telemundo broadcast networks, pay TV channels such as USA, CNBC, Bravo and SyFy, the Universal Pictures movie studio and theme parks in Florida and California.

Comcast bought a 51 percent stake in NBCUniversal in January 2011, while General Electric Co. had the remaining 49 percent. Comcast had planned to take a larger stake over seven years, starting in July 2014.

“We thought that we would have to pay more later,” CEO Roberts said. “We really have known we wanted to buy 100 percent from the beginning of the transaction.”

The deal, expected to close by the end of March, values NBCUniversal at around $34 billion, and it has about $5 billion in debt. When Comcast bought the 51 percent stake in the company in 2011, it was valued at around $30 billion.

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