Comcast answers critics; quarterly profit soars

Comcast Corp. said uncle.

Facing a public lashing by big shareholders, the Philadelphia company relented yesterday and told Wall Street that it would pay an annual 25-cent dividend and accelerate a $7 billion share-repurchase plan to boost returns to investors.

The cable giant also denied speculation that it would make an offer for Yahoo Inc., the Internet search engine, or Sprint Nextel Corp., the wireless company.

"We are not spending any time on large transformative acquisitions," Brian Roberts, chief executive officer and chairman, said in a conference call discussing fourth-quarter earnings and revenue. "We are committed to remaining disciplined. . . . I believe we have set the stage for many years of growth."

Shares in the nation's largest cable company have plunged 35 percent in the last year, making it one of the worst-performing widely held stocks in the United States.

Investors feared that Comcast would spend an anticipated surge in cash flow on business ventures or big acquisitions, instead of on them.

"Today was a good start," said Glenn Greenberg, of Chieftain Capital Management, of New York, in an e-mail. "We are pleased with the renewed focus on the metrics that will over time create value for shareholders."

Greenberg has criticized Comcast's performance and called for Roberts' ouster.

He added in the e-mail that the "compensation scheme at Comcast needs big reworking to align manager (compensation) with shareholder returns. . . . We still do not have a date to meet with the independent committee of the board to discuss this important matter and others. Time will tell whether management needs to be changed or this one will be able to make the necessary, significant adjustments to earn a high return for us."

Comcast shares soared 8.03 percent, or $1.43, to $19.24 in trading yesterday even as the broad market declined because of concerns over the slowing economy.

The Philadelphia company disclosed the financial moves when it reported that fourth-quarter revenue rose 14 percent and net income shot up 54 percent, partly from investment gains and proceeds from the dissolution of a cable partnership.

Revenue for the quarter ended Dec. 31 was $8 billion, compared with $7 billion in the same period in 2006.

Net income was $602 million, compared with $390 million a year earlier.

Per-share earnings were 20 cents, beating an analyst estimate of 17 cents. A year earlier, per-share earnings were 13 cents.

The solid performance was somewhat overshadowed by evidence of a growing threat to Comcast's core cable TV business.

The cable company lost 94,000 video subscribers in the fourth quarter and 180,000 for the year.

About two weeks ago, Verizon Communications Inc. said in its earnings that its FiOS TV service gained 226,000 subscribers in the fourth quarter.

"There is no question that Verizon is real, and they are taking customers from us," said Comcast chief operating officer Stephen B. Burke.

Comcast would boost spending on marketing and customer service, Burke said. "We are budgeting to come out swinging."

Comcast's average per-subscriber revenue rose, and it added 604,000 Internet phone customers.

Roberts said the company's goal was to boost revenue through its five business lines - TV video, phone, high-speed Internet, commercial data services, and advertising.

"It's still one of the best businesses," Roberts said in a phone interview. "Yes, things have changed. But we change with them."

The dividend and share buyback were considered for months, Roberts said, noting, "we tried to do something that was good for all shareholders."

He was not concerned that the dividend would create the perception that Comcast is a maturing company, Roberts said, because 90 percent of the nation's 100 largest companies pay dividends.

In a separate bow to Wall Street, Comcast told financial regulators Wednesday that company cofounder Ralph Roberts, who is Brian Roberts' father, had slashed his annual pay to $1 a year and would not receive a death benefit of five years of paid salary. Ralph Roberts, 87, remains a full-time employee and adviser to his son and other executives.

Comcast's top company executives also agreed to discount their 2007 bonuses.

Subscribers

Cable TV: 24.1 million.

High-speed Internet: 13.2 million.

Telephone: 4.6 million.

Company facts

2007 revenue: $30.9 billion.

Profit: $2.59 billion.

Earnings per share: 83 cents.

Total 5-year return on stock: 10.74 percent.

Employees: 9,300.

CEO: Brian Roberts.

Headquarters: Phila.