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Comcast Corp. (CMCSA - Free Report) reported mixed financial results for the fourth quarter of 2013. After a gap of 26 quarters, the company added 43,000 video subscribers compared with a net loss of 7,000 video customers in the prior-year quarter. Following the results, the company raised its share buyback plan to $7.5 billion. Consequently, Comcast hiked its yearly dividend payments by 15.4% to 90 cents per share.

Comcast currently has a Zacks Rank #3 (Hold).   

Fourth-Quarter Results in Detail

GAAP net income for the fourth quarter of 2013 was $1,913 million or 72 cents per share compared with $1,518 million or 56 cents per share in the prior-year quarter. However, quarterly adjusted earnings per share of 66 cents missed the Zacks Consensus Estimate of 68 cents. Total revenue came in at $16,926 million, up 6.2% year over year and also above the Zacks Consensus Estimate of $16,678 million.

Quarterly operating costs and expenses were $11,281 million, up 5.5% year over year. However, quarterly operating income was $3,647 million, representing annualized growth of 9.7%. Operating margin was 21.5% compared with 20.7% in the prior-year quarter. During the fourth quarter, Comcast repurchased 10.8 million worth of its common shares for $500 million and paid dividends totaling $510 million.

In the fourth quarter of 2013, Comcast generated $5,645 million of cash from operations compared with $5,277 million in the year-ago quarter. Consolidated free cash flow was $1,435 million as against $1,832 million in the prior-year quarter. Cash and marketable securities, at the end of the fourth quarter of 2013, were $5,291 million against $12,415 million at the end of 2012. Total debt at the end of the reported quarter was $44,567 million as against $38,082 million at the end of 2012. The debt-to-capitalization ratio was 0.47 versus 0.43 at the end of 2012.

Cable Communications Segment

Quarterly total revenue was $10,661 million, up 5.2% year over year. Operating cash flow was $4,405 million, up 4.8% year over year. Within this segment, Video revenues were $5,120 million, up 2.9% from the prior-year quarter. High-Speed Internet revenues were $2,650 million, up 8.7% year over year. Voice revenues were $928 million, up 3.7% year over year. Advertising revenues were $602 million, down 7.5% from the year-ago quarter. Business Services revenues were $876 million, up 25.3% year over year. Other revenues were $485 million, up 8.5% year over year.

On Dec 31, 2013, Comcast had 20.662 million (up 6.3% year over year) High-Speed Internet customers; 10.723 million (up 7.2% year over year) Voice customers; and 21.690 million (down 1.4% year over year) Video customers. The company added a net of 379,000 High-Speed Internet customers compared with 341,000 in the year-ago quarter. Similarly, Comcast added a net 227,000 voice customers as against 168,000 in the prior-year quarter.  

NBC Universal Segment

Quarterly total revenue was $6,464 million, up 7.5% year over year. Operating cash flow was $1,338 million, reflecting a 14.3% year-over-year increase. Within this segment, Cable Networks revenues were $2,324 million, up 5.3% year over year. Broadcast TV revenues were $2,227 million, up 11.5% year over year. Filmed Entertainment revenues were $1,448 million, up 4.9% from the year-ago quarter. Theme Parks revenues were $566 million, up 8.8% year over year.

Our Take

Comcast completed its major technical innovations, such as DOCSIS 3.0, all digital networks and a multi-platform content delivery network. Moreover, launch of innovative services such as Xfinity Home, Wi-Fi, Streampix, X1, upcoming X2 and the high-speed Metro Ethernet will not only drive subscriber growth for the company but will also safeguard its position against major carriers like Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) and online video streaming service providers like Netflix Inc. (NFLX - Free Report) .

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