Comcast acquisition of NBC Universal stake to overshadow 4Q results

Earnings Preview: Comcast to report 4Q earnings

PHILADELPHIA — Comcast Corp., already the nation’s largest cable TV operator and now poised to become a major entertainment company, reports its fourth-quarter results before the market opens Wednesday. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: Comcast’s purchase of a 51 percent stake in NBC Universal from General Electric Co. is expected to overshadow its fourth-quarter earnings report.

The cable operator is on the cusp of becoming one of the nation’s largest entertainment companies. That is if federal regulators don’t block the deal following complaints from consumer groups and competitors that the transaction would harm competition. The deal will cost Comcast about $13.75 billion in cash and assets.

Comcast has said the deal is pro-consumer and current regulations forbid it from discriminating against its competitors in subscription TV, which will have to strike programming and retransmission deals with NBC’s cable channels and TV stations.

BY THE NUMBERS: Analysts expect the cable operator to earn 27 cents per share in the quarter and post revenue of $8.97 billion, according to Thomson Reuters. In the fourth quarter of 2008, Comcast earned 27 cents per share on revenue of $8.76 billion.

ANALYST TAKE: Chris Marangi, an analyst at Gabelli & Co., said he’s looking for an update on the regulatory review of the NBC Universal deal as well as more financial details about the deal itself. In addition, he’s watching for Comcast’s outlook for 2010 and its capital spending plans for moving more analog channels to digital.

WHAT’S AHEAD: Comcast is making its case to regulators in Washington that its purchase of a controlling stake in NBC Universal will not harm competition. While the opposition from consumer groups and rivals has been strong, the deal is expected to be approved. What’s not as clear is what kind of concessions Comcast will have to make to get the transaction completed.

STOCK PERFORMANCE: Investors have misgivings about Comcast’s pursuit of NBC Universal. Since rumors of the deal came out Sept. 30, the stock has fallen by more than 8 percent. Comcast has traded between a low of $11.10 and a high of $17.88 over the past 52 weeks.