Comcast Q4 earnings rise on Internet customers, NBCUniversal

Comcast Corp., the largest U.S. cable company, said Tuesday its fourth-quarter net income rose 0.6% to $1.93 billion as it gained more broadband Internet customers and higher revenues at its NBCUniversal subsidiary.

Adjusted earnings per share of 77 cents matched analysts' consensus estimates. The estimates ranged from 76 cents to 81 cents, as compiled by Zacks Investment Research.

Comcast shares rose 1.3% to $58.96.

Operating revenue rose 4.8% to $17.7 billion.

The Philadelphia-based media giant increased its dividend by 11.1% to $1 per share on an annualized basis. It declared a quarterly dividend of 25 cents a share. Its board of directors also authorized buying back stock up to $10 billion, up from $4.25 billion currently planned for 2015.

Comcast, which is waiting for regulatory approval of its proposed $45 billion deal to buy Time Warner Cable, said its cable communications revenue rose 6.1% to $11.3 billion. Higher revenues for Internet and pay-TV businesses helped offset falling phone subscriptions.

Its total "customer relationships" increased by 178,000 to 27 million during the fourth quarter, including 6,000 new customers in pay-TV. But with consumers increasingly electing to stream movies and TV shows, broadband Internet remains the growth driver. It gained 1.3 million new Internet customers in 2014, while pay-TV customers fell by 194,000.

Revenue at NBCUniversal, which operates NBC, Telemundo, Universal Studios and Universal Pictures, rose 2.3% to $6.6 billion.

The cable networks segment reported a 5.6% decline in advertising revenue but its distribution revenue rose 4.6%.

Revenue for the broadcast television segment rose 4.8% to $2.3 billion as ad sales and retransmission consent fees were higher.

Revenue from the filmed entertainment segment fell 10.6% from a year ago to $1.3 billion. The company said the drop in the year-over-year comparison was due to "the strong performance" of Despicable Me 2 in the fourth quarter of 2013.

Revenue from the theme parks segment rose 29.9% to $735 million as its parks saw more visitors and they spent more per person.

"Comcast performed at or above expectations on just about every measure and growth continues to be largely driven by broadband and commercial services," wrote Vijay Jayant, an industry analyst at Evercore Partners.

In an earnings call with analysts Tuesday morning, Comcast CFO Michael Angelakis said the company is "optimistic" that the proposed merger with Time Warner Cable will close in early 2015.

Some analysts say Comcast may have to agree to concessions in return for approval. In the call, the company's executives didn't discuss if they have begun negotiating with federal regulators about concessions.

With the anticipated merger approval date closer, analysts have recently started to question the long-term effects of the regulatory pressures coming from Washington, D.C.

The Federal Communications Commission is in the midst of recasting "net neutrality" rules that could impose new restrictions on the industry's Internet business, a process that complicates the merger review process.

FCC Chairman Tom Wheeler has proposed the "Title II" option for new net neutrality rules, meaning Internet service providers will be treated like telecommunications services and prohibited from discriminating content providers by blocking their content or throttling their speeds.

Wheeler has allowed "forbearance" on some practices, or the process by which the FCC will not apply certain enforcement rules. The FCC's commissioners are expected to vote on Wheeler's proposals Thursday.

Responding to an analyst's question about net neutrality, Comcast CEO Brian Roberts repeated the company's opposition to Wheeler's proposals in general but said it "will have to appropriately adjust" if the Title II option is eventually adopted. He said he was "heartened" to hear Wheeler's desire to implement some forbearance measures.