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Comcast has a strong second quarter

Comcast's newly acquired NBCUniversal also does well, with all entertainment divisions posting double-digit revenue growth.

August 04, 2011|By Meg James, Los Angeles Times

When it comes to the purchase of media companies, timing is key.

Comcast Corp. on Wednesday delivered strong second-quarter earnings, led by the company's core businesses of providing cable television and high-speed Internet service to its more than 20 million customers.

But its newly acquired media company, NBCUniversal, also shone, as each of its entertainment divisions turned in double-digit revenue growth. NBCUniversal revenue jumped 17% — a much stronger performance than the company mustered in recent quarters when General Electric Co. was in control.

Comcast completed its acquisition of a 51% interest in NBCUniversal in late January, more than 14 months after it structured its joint-venture deal with GE. At that time, some of NBCUniversal's businesses, primarily its broadcast network, appeared to be on the ropes.

"Our timing was just right," Comcast Chief Executive Brian Roberts told analysts in a morning conference call.

NBCUniversal benefited primarily from a much healthier advertising market as well as the continued success of its cable television channels. GE continues to hold a 49% stake, but it plans to exit the media company completely in the coming years.

This was the first full quarter that Comcast has reported since acquiring controlling interest in NBCUniversal.

For the quarter that ended June 30, NBCUniversal's revenue was $5.2 billion, compared with $4.4 billion in the second quarter of 2010. The company's operating cash flow of $1 billion was up 5.2% from the year-ago period.

NBCUniversal's cable channels, including USA Network, Syfy, E! and Bravo, led the way with $2.2 billion in revenue, up 12.6% from the year-ago period. The broadcast television division, including the fourth-place NBC network, collected $1.7 billion in revenue, an 18.5% climb from 2010.

The company's Los Angeles-based film studio, Universal Pictures, generated $1.3 billion, an increase of 21% from the year-earlier period. The Universal theme parks, buoyed by the success of the Harry Potter attraction at the Orlando, Fla., park, took in $147 million, 22.5% more than in the year-ago period.

"The bottom line is we are off to a very strong start," NBCUniversal Chief Executive Steve Burke said. "We are making investments, and they are starting to work."

Analysts, however, expressed concern that the advertising market might take another hit as the economy appears to be flat-lining again. Burke said the company saw ad revenue increases in the second quarter, but "we are obviously concerned about the economy, as you would expect us to be."

Comcast as a whole posted revenue of $14.3 billion, an increase of 50% over the year-earlier period. The higher revenue was attributed to the consolidation of NBCUniversal as well as strong operating results.

Comcast's net income rose 16% to $1.02 billion, or 37 cents a share, compared with $884 million, or 31 cents a share, during the second quarter of 2010.

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