Comcast (CMCSA) said late Tuesday it will buy out General Electric's (GE) remaining stake in NBC-Universal for $16.7 billion and hiked its 2013 dividend, sending the cable TV firm's shares up 7% in after-hours trading.
In addition to the 20% payout hike — at the low end of analysts' estimate — Comcast will buy back $2 billion in stock in 2013.
Comcast will take full ownership of NBCUniversal, in the midst of a turnaround, at a good price, analysts say. It bought 51% of NBCU from GE in early 2011.
Comcast has been slated to buy GE's remaining stake in two stages, in 2014 and 2018. Bernstein Research had estimated the cost of acquiring GE's remaining stake in two stages at $19 billion.
Deal Buzz In Recent Weeks But GE was willing to make an earlier exit from the media business, aiming to reinvest the NBCU sale proceeds in industrial markets. Analysts told IBD in January that Comcast and GE were negotiating a deal around $16 billion, just below what the companies announced Tuesday.
GE shares climbed 3% late.
Waiting until 2018 to finalize the deal would be risky for both Comcast and GE, analysts said, because the price tag would be tied to NBCU's performance. The final bill would be set at a market multiple of its EBITDA (earnings before interest, taxes, depreciation and amortization).
Comcast moved up its Q4 earnings release to late Tuesday from early Wednesday. Profit rose 11% to 52 cents a share excluding tax adjustments and other items. Revenue climbed 5.9% to $15.94 billion. Both slightly missed forecasts of a 53-cent gain on sales of $15.99 billion.
Some analysts had speculated that the No. 1 U.S. cable TV firm, with 22 million subscribers, would add net video subscribers for the first time since Q1 2007. Comcast did not, but shaved customer losses to 7,000 in Q4 vs. 17,000 a year earlier.
Some analysts had estimated Comcast would hike its 2013 dividend by as much as 30%.
"I am really pleased to report strong results for the 4th quarter and delighted that we are able to accelerate the acquisition of General Electric's 49% common equity interest in NBC-Universal while also having the financial strength to return capital to shareholders," said Comcast Chairman and CEO Brian Roberts in a statement.
"NBCUniversal's results principally highlight the improving performance of our broadcast businesses. . .. As we begin 2013, our scale in distribution and content, combined with our focus on execution and innovation, provides many opportunities to continue to build value for our shareholders.
NBCU revenue rose 4.8% to $6 billion in Q4. EBITDA climbed 11.4% to $1.17 billion.