Top brass at Comcast Corp. and General Electric remain hopeful that the NBC Universal deal will close by year’s end.
In talking up Comcast’s first quarter earnings on Wednesday, Comcast CEO Brian Roberts said the timing of the union should prove fortuitous as the TV advertising market continues to rebound from one of the most severe slumps in recent history.
“It’s not just one segment … Automotive has turned around. There’s pent-up demand. It bodes well for the timing of the transaction, in terms of when we chose to do the deal,” Roberts said during a conference call.
The advertising uptick, along with strength in premium services like high-speed Internet and digital TV, helped boost Comcast’s net profit for the first quarter ended March 31 by 12% to $866 million, offsetting a dip in basic video subscriptions. In other words, fewer people signed up for basic cable, but existing customers added new services at a brisk clip.
Revenue grew 3.8% to $9.2 billion. Advertising revenue jumped 23% to $360 million.
Roberts offered few details on the NBC Universal transaction, but said the new partners are well underway on the planning side, and, when the deal closes, will be ready to execute. He said he was pleased by investors’ positive response to a $4 billion debt offering earlier this week of five-, 10- and 30-year notes issued by NBC Universal — a first for the company — to help finance the transaction.
“Yesterday was a good milestone. We were able to access the capital markets in a very good offer,” Roberts said.
Meanwhile, GE chief financial officer Keith Sherin told shareholders Wednesday during the conglom’s annual meeting in Houston that GE also expects the deal to close by year’s end. There’s been speculation that the regulatory approval process may drag on into next year after the Federal Communications Commission moved earlier this month to extend the public comment period well beyond the initial May 3 cutoff. The FCC acted partly in response to mounting pressure from pols and advocacy orgs for tougher scrutiny of the deal, unveiled in early December.
Sherin told GE shareholders that the NBC U transaction with Comcast is “the right deal at the right time.” He emphasized that it will allow GE to focus on its core industrial and manufacturing businesses and “redeploy capital out of media into the core of GE.”
During the Comcast call, Roberts noted that Comcast has been working with the FCC and Dept. of Justice on the approval process for more than four months, and execs have taken part in four Congressional hearings on the deal. The major concerns raised by opponents of the deal include the prospect of Comcast, already the nation’s largest cable operator and one of the largest broadband providers, gaining still more market share.
Comcast said NBC U deal-related costs totaled $29 million for the quarter.
In its core cable system biz, Comcast said it signed up 427,000 households for digital service during the quarter, a 48% jump from a year ago. It added 399,000 high-speed Internet customers, up 21%. But growth in phone customers slowed. Comcast added 275,000 new phone subscribers in the quarter, vs. 298,000 the year before.
Comcast’s better-than-expected earnings report sent its shares up 35¢ in trading Wednesday to close at $18.81, near its 52-week high of $19.20.
(Cynthia Littleton contributed to this report.)