Comcast reported that Q4 revenues shot up 54.7% to $15.04 billion, including the addition of NBCUniversal. On a pro forma basis that was a 3.1% gain, but still pretty good. NBCU, though, was up only 0.8% to $5.74 billion.
NBCU operating cash flow (OCF) was down 6.8% to $1.05 billion, but that was still better than Wall Street expectations. Excluding acquisition-related accounting revisions and costs totaling $33 million in Q4 of 2011, OCF decreased 3.9%
Revenue from the Broadcast Television segment (NBC, Telemundo and the O&O stations) decreased 3.7% to $1.84 billion,” primarily reflecting ratings weakness at the NBC broadcast network, lower political advertising at NBC owned local stations and the impact of four fewer days in our advertising calendar,” the company said. Negative OCF of $80 million compared to positive OCF of $55 million a year earlier. The results for the most recent quarter reflected lower revenue as well as higher marketing costs and acquisition-related accounting revisions totaling $28 million. Excluding these accounting revisions, NBCU reported a Q4 OCF loss of $52 million.
Comcast CEO Brian Roberts told analysts that 2011 was a year of integrating the two companies and making investments in NBCU. “Some of these investments are already paying off and others will pay off over time,” he said. “We invested in new shows in both cable networks and on our broadcast networks. We invested in our owned stations. We extended the NHL and PGA rights, purchased 100% of the Orlando theme parks, have some exciting film franchises launching in 2012, we invested to extend the Harry Potter franchise in several of our theme parks – we also brought together all of our companies’ capabilities in successful bids for the Olympics, for the Spanish-language rights for FIFA World Cup soccer and we extended the all-important Sunday night football franchise with the NFL.”
That, it should be noted, was Roberts focusing heavily on investments made in the broadcast side, even though he and others at Comcast made no secret of the fact that their interest in acquiring NBCU was primarily for its Cable Networks business, with NBC and the rest of broadcasting viewed as a bonus which might have some future upside value.
Q4 revenue from the Cable Networks segment increased 5.3% to $2.21 billion, primarily driven by a 10.4% increase in distribution revenue. Advertising revenue increased 2.0% this quarter, but that low figure was attributed primarily to the impact of four fewer days in the advertising calendar and fewer NBA games due to the lockout. OCF increased 15.3% to $923 million, “reflecting higher revenue and relatively flat programming, production and marketing costs resulting from lower programming and production activity in the fourth quarter and lower production costs due to fewer NBA games.” Excluding acquisition-related accounting revisions, Cable Networks OCF for Q4 increased 16.2% to $930 million.
RBR-TVBR observation: There’s no denying that Comcast has made good on its pledge to invest on the broadcasting side. The payoff will take time, but NBC has lately had some ratings success with something besides Sunday Night Football – notably “The Voice” and “Smash.” And NBCU will no doubt book lots of cash this year from the London Olympics across multiple broadcast/cable/online platforms and at its NBC/Telemundo O&O stations from political advertising.