Comcast, Pressured by Holders, Sets Buyback, Dividend

(Bloomberg) -- Comcast Corp., the cable-TV operator pressured to boost investor returns, said it will buy back $6.9 billion of its stock over two years and pay its first dividend in almost a decade, sending the shares up the most in five years.

Fourth-quarter net income rose 54 percent to $602 million, or 20 cents a share, from $390 million, or 13 cents, a year earlier, Philadelphia-based Comcast said today in a statement. Profit beat the 17-cent average of 17 analysts' estimates compiled by Bloomberg. Sales gained 14 percent to $8.01 billion.

The buyback and annual dividend of 25 cents followed criticism from investors including Chieftain Capital Management Inc., who said Comcast's acquisitions and capital spending were excessive. Last month, Chieftain called for Comcast to reward shareholders and oust Chief Executive Officer Brian Roberts.

``Investors had been looking for a return of cash,'' Sanford C. Bernstein & Co. analyst Craig Moffett said in an interview on Bloomberg Radio. ``That signals confidence from the management that they really do believe that capital intensity is going to fall. We got that this morning in a big share repurchase.''

Moffett, based in New York, rates the stock ``outperform.''

Comcast rose $1.26, or 7.1 percent, to $19.07 at 9:32 a.m. New York time in Nasdaq Stock Market trading, after gaining as much as 7.2 percent, its biggest rise since October 2002. The stock had declined 35 percent in the past year before today.

The company may increase its dividend ``over time,'' co- Chief Financial Officer Michael Angelakis said on a conference call.

 

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