Comcast Q1 was up 13.7%; NBCU up 28.8%

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Comcast-logoVideo subscriber growth and the 2014 Sochi Winter Olympics drove Q1 revenue up 13.7% to $17.4 billion. Excluding $1.1 billion of revenue generated by the Olympics, consolidated revenue increased 6.5%. Consolidated Operating Cash Flow increased 10.0% to $5.5 billion. Excluding $17 million of costs related to the Time Warner Cable transaction in the quarter, consolidated operating cash flow increased 10.4%. Consolidated Operating Income increased 16.3% to $3.6 billion.


EPS for the quarter was $0.71, a 31.5% increase from the $0.54 reported in the first quarter of 2013. Excluding gains on the sale of an investment and a favorable resolution of a prior acquisition contingency in Q1, as well as a gain on the sale of wireless spectrum licenses in the first quarter of 2013, EPS increased 33.3% to $0.68.

Cap Ex increased 6.4% to $1.4 billion in the first quarter of 2014 compared to the first quarter of 2013. Cable Communications’ capital expenditures increased $51 million, or 4.6%, to $1.1 billion in Q1, primarily reflecting increased spending on customer premise equipment related to the deployment of the X1 platform and wireless gateways. However, the new X1 digital set-top box which gives customers the ability to watch TV shows stored online, helped Comcast add  24,000 TV customers in the quarter to reach a total of 22.6 million.

Overall subscribers increased by 124,000 to 26.8 million in the quarter. At the end of Q1, penetration of triple product customers increased to 36% compared to 33% in the first quarter of 2013. In addition, video, high-speed Internet and voice customers increased.

Cable capital expenditures represented 10.6% of Cable revenue in the quarter compared to 10.7% in last year’s first quarter. NBCUniversal’s cap ex increased $28 million to $291 million in the first quarter of 2014, primarily reflecting increased investments in Theme Parks and facilities.

Dividends and Share Repurchases. During Q1, Comcast paid dividends totaling $508 million and repurchased 15.0 million of its common shares for $750 million. As of March 31, 2014, Comcast had approximately $6.75 billion available under its share repurchase authorization.

Revenue for Cable Communications increased 5.3% to $10.8 billion in the first quarter of 2014 compared to $10.2 billion in Q1 2013, driven by increases of 9.0% in high-speed Internet and 23.9% in business services. The increase in Cable revenue reflects rate adjustments, customers receiving higher levels of services and customer growth.

Revenue for NBCUniversal increased 28.8% to $6.9 billion in the quarter,  compared to $5.3 billion in the first quarter of 2013, primarily driven by 2014 Sochi Olympics revenue of $1.1 billion included in the Broadcast Television and Cable Networks segments. Excluding the Olympics, NBCUniversal revenue increased 8.1%. Operating Cash Flow increased 37.6% to $1.3 billion compared to $953 million in the first quarter of 2013, driven by a profitable Olympics and strong results at Filmed Entertainment and Broadcast Television.

Cable Networks

In Q1, revenue from the Cable Networks segment increased 12.6% to $2.5 billion compared to $2.2 billion in the first quarter of 2013 and included $257 million of revenue generated by the 2014 Sochi Olympics. Excluding the Olympics, revenue increased 1.0% reflecting a 4.4% increase in distribution revenue, partially offset by a 1.4% decrease in advertising revenue. Operating cash flow increased 4.2% to $895 million compared to $859 million in the first quarter of 2013, reflecting higher revenue, partially offset by higher sports programming costs, including the impact of the Olympics, and our continued investment in original programming.

Broadcast Television

Revenue from the Broadcast Television segment increased 72.8% to $2.6 billion in Q1, compared to $1.5 billion in the first quarter of 2013 and included $846 million of revenue generated by the 2014 Sochi Olympics. Excluding the Olympics, revenue increased 17.0%, driven by a 15.8% increase in advertising revenue due to strong ratings at the NBC broadcast network, as well as an increase in content licensing revenue and higher retransmission consent fees. Operating cash flow increased $157 million to $122 million compared to a loss of $35 million in the first quarter of 2013, reflecting higher revenue, partially offset by higher programming and production costs related to the Olympics.

Filmed Entertainment

Revenue from the Filmed Entertainment segment increased 11.1% to $1.4 billion compared to $1.2 billion the first quarter of 2013, driven by higher theatrical revenue from the strong performances of Ride Along and Lone Survivor and the international performance of The Wolf of Wall Street. Operating cash flow increased $219 million to $288 million compared to $69 million in the first quarter of 2013, reflecting higher revenue and a decrease in the amortization of film costs.

Theme Parks

Revenue from the Theme Parks segment increased 5.4% to $487 million compared to $462 million in the first quarter of 2013, driven by higher per capita spending at the Orlando and Hollywood theme parks and stable guest attendance, despite a shift in holiday timing. Q1 operating cash flow decreased 1.5% to $170 million compared to $173 million in same period last year, primarily reflecting increased operating costs to support new attractions.

Said Brian Roberts Comcast CEO: “Our operating momentum is continuing as we enter 2014 and is highlighted by our second consecutive quarter of video customer growth, as well as strength in high-speed Internet and business services. Our focus on the customer experience continues to drive our success as we deliver the most innovative products in the industry and make measurable progress in customer service. At NBCUniversal, we had another superb quarter with double-digit revenue and operating cash flow growth driven by the tremendously successful Sochi Olympics and the best season-to-date broadcast ratings in a decade. Overall, the company is performing well and the more planning we do for our proposed merger with Time Warner Cable, the more excited we are by the opportunities for the combined company. Comcast has tremendous momentum right now, and we believe the TWC transaction will strengthen a truly world-class organization that will be well positioned to compete and yield meaningful benefits to our customers, employees, and shareholders.”

RBR-TVBR observation: Comcast got a big boost from the Olympics, but the news of the proposed $45 billion merger with TWC also helped drive up stock prices. When and if the deal is approved, we will be able to see how the maximum of some 30 million subscribers will further drive up revenues and profits. The savings from consolidating the two companies should drive growth for years. Comcast continues to demonstrate how well vertically integrating its many complimentary assets leads to improving the bottom line. That will continue with the addition of Time Warner Cable—it’s not just about consolidating functions, it’s also about offering new products and networks (especially sports) to subscribers–and providing advertisers and expanded footprint for their buys.


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Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.