Comcast Sticks To Its Knitting

Comcast executives declined to talk about the growing speculation that the nation’s largest cable operator would be peripherally involved in Charter Communications’ much hyped pursuit of Time Warner Cable in its much anticipated earnings conference call Tuesday morning, instead focusing on its own internal results.

Newly hired senior vice president of investor relational Jason Armstrong set the tone of the conference call, telling analysts that despite the consolidation news swirling around the company, it would have no comment on recent press reports or industry consolidation.

Reports on Monday said that Comcast was close to a deal to purchase Time Warner Cable systems in New York, New England and North Carolina from Charter if the latter was successful in its attempt to acquire TWC.

While Comcast left that question hanging it devoted the next hour to detailing what was a strong quarter for the cable giant operationally, with consolidated revenue up 5.8% for the quarter and operating cash flow up 8.7%, fueled by increases in its cable distribution and content operations.

At the cable unit, revenue was up 5.2% for the quarter to $10.7 billion and operating cash flow rose 4.8% to $4.4 billion, driven by a gain in basic video customers and continued strong growth in high-speed data and phone customers.

Comcast added about 43,000 basic video customers in the quarter, spurred by what cable unit CEO Neil Smit said was refocused marketing efforts, reduced churn in part due to its X-1 platform rollout, better customer service and overall better execution. The company said that about 45% of its customer self-installed service and 36% are managing their accounts on line, which has helped reduce truck rolls by 3.5 million in the quarter.

Investors seemed pleased, driving Comcast shares as high as $54.13 each in early trading Jan, 28, up about 3.1% or $1.64 per share.  

“We feel we’re competing well on both the fiber side and on the satellite side,” Smit said on the call, “Part of that is X-1 products is performing well, part of it is just great execution and we’re targeting our marketing better, our services are getting better.”

While cable enjoyed a strong fourth quarter, Comcast’s NBC Universal programming unit also seemed to turn a corner, with revenue up 7.5% to $6.5 billion and OCF up 14.3% to $1.3 billion.

AT NBCU, cable networks revenue rose 5.4 % to $9.2 billion and OCF increased 6% to $3.5 billion, On the broadcast side, revenue rose 11.5% to $2.2 billion and OCF increased 54.8% to $140 million.

On the conference call, NBCU CEO Steve Burke said there are substantial growth opportunities ahead for the unit.

Burke added that since Comcast first purchased an interest in NBCU in 2009, cash flow at the unit has increased by 50%

“We feel like we still have a long way to go,” Burke said on the call. “Opportunities exist across the board.”

That includes additional attractions and hotels at its Theme Parks unit, as well as building on ratings increases at NBC.

“We now have ratings,” Burke said of the broadcaster. “First you have to get the ratings and then you can sell the ratings. I think broadcast has real upside. We seem to be hitting our stride and being a little more strategic with our portfolio in Film, and we’ve got a great group of cable networks, We do feel there is a monetization gap between how we’re doing in terms of ratings and box office and everything else and the amount of operating cash flow we’re generating, but pretty much everywhere you look we still think there is a lot of opportunity. We believe we’re off to a good start but there is plenty more to go.”