Yesterday, after the closing bell, Comcast Corp. (CMCSA) reported its fourth-quarter 2012 financial results, which fell below the Zacks Consensus Estimates. However, in the after market trade on NASDAQ, the stock price of Comcast was up $2.78 (7.13%) to $41.75. We believe there are three reasons for the share price increase: (1) Despite missing the Zacks Consensus Estimates, the year-over-year financial growth was strong, (2) The company’s decision to acquire the remaining 49% stake of NBC Universal from General Electric Co. (GE) and (3) Significant hike in shareholders’ wealth. Comcast currently has a Zacks Rank #3 (Hold).
Fourth Quarter Results in Details
GAAP net income for the fourth quarter of 2012 was $1,518 million or 56 cents per share, compared with net income of $1,287 million or 47 cents per share in the prior-year quarter. However, quarterly adjusted earnings per share of 52 cents were a penny shy of the Zacks Consensus Estimate. Total revenue came in at $15,937 million in the reported quarter, up 6% year over year, but fell below the Zacks Consensus Estimate of $16,022 million.
Quarterly operating costs and expenses were $10,660 million, up 5.3% year over year. However, quarterly operating income was $3,294 million, representing an annualized growth of 12.9%. Operating margin, in the fourth quarter of 2012, was 20.7% against 19.4% in the prior-year quarter. During the reported quarter, Comcast repurchased 21.1 million of its common shares for a consideration of $750million and paid dividends totaling $432 million.
During the fourth quarter of 2012, Comcast generated $5,277 million of cash from operations compared with $4,916 million in the year-ago quarter. Consolidated free cash flow in the reported quarter was $1,832 million, compared with $1,876 million in the prior-year quarter. Cash and cash equivalents, at the end of 2012, were $12,415 million compared with $1,674 million at the end of 2011. Total debt at the end of 2012 was approximately $40,458 million compared with $39,309 million at the end of 2011. At the end of 2012, debt-to-capitalization ratio was 0.43 compared with 0.44 at the end of 2011.
Cable Communications Segment
Quarterly total revenue was $10,132 million, up 7% year over year. Operating cash flow was $4,021 million, up 6.7% year over year. Within this segment, Video revenue was $5,043 million, up 2.9% year over year. High-Speed Internet revenue was $2,438 million, up 8.7% year over year. Voice revenue was $895 million, up 1.4% year over year. Advertising revenue was $652 million, up 19.4% year over year. Business Services revenue was $660 million, up 32.4% year over year. Other revenue was $444 million, up 11.1% year over year.