Comcast Reports Q4 Profit Gain, Announces $7B Stock Buyback

CEO Brian Roberts Expects Q4 Slowdown in Adding RGUs to Continue Into 2008
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As cable companies fight new telco entrants, Comcast, the nation's largest cable operator, gave shareholders a nice Valentine’s Day card, reporting a 54% increase in fourth-quarter profit. Investors liked the news and Comcast's stock rose Thursday by $1.43, or 8%, to $19.24 per share.

Comcast also said it will start paying a quarterly dividend beginning this spring and buy back $7 billion in stock -- both moves apparently in reaction to investors’ anxiety over the still-low stock price. Those measures were announced one day after the company said CEO Brian Roberts and his father, company founder Ralph Roberts, would reduce compensation to themselves.

In the fourth quarter, Comcast reported a net income of $602 million (20 cents per share), compared with $390 million (13 cents) in the fourth quarter a year ago. Revenue was up 14% to $8 billion. Some of the gains were attributable to new acquisitions.

In 2008, free cash flow is projected to rise at least 20% from its level of $2.3 billion in 2007.

Among its main businesses, video, Internet and phone revenue all rose, and Comcast’s digital-voice business continued to gain customers. The company added 1.2 million revenue-generating units, or RGUs, which is the number of services sold and is considered a key indicator. That was down by 400,000 from the same quarter a year ago.

The number of new basic subscribers fell and digital sign-ups slowed, as did the number of new Internet customers. In a conference call, Brian Roberts said the company saw business slow down toward the end of 2007, and he expects that trend to continue this year.

Still Comcast is projecting 8%-10% growth in overall revenue and operating cash flow for 2008. It also expects to post free cash-flow growth of at least 20%.

For the year, Comcast posted a 2% increase in profit to $2.59 billion, (83 cents per share). Revenue increased by 24% to $30.9 billion.