Comcast Gives the Street Relief
Comcast's stock has fallen more than 30 percent in the past year--painful for Comcast shareholders, including some activist shareholders who own chunks of stock.
But Thursday, Comcast's stock made gains after the cable company announced its earnings and a quarterly dividend that amounts to 25 cents per share annually.
That 1.4 percent dividend yield is far less than what Wall Street was hoping for. Still, it's a start. Activist shareholder Glenn Greenberg from Chieftain Capital Management--which owns 2 percent of Comcast--said he was "very happy" with the company's move.
He'd been frustrated with CMCSA's stock price, pushing for Comcast Chief Executive Brian Roberts to get the boot. Now it looks like he can call off the dogs.
In other good news for shareholders, Comcast said it would complete its $6.9 billion share repurchase authorization by end of 2009. It promised to keep capital spending in check. (Last year it spent $6 billion on cap ex--some 20 percent of total revenue. This year it'll keep that spending to 18 percent of sales).
And Comcast founder Ralph Roberts is cutting his salary from the $1.85 million he brought in last year to just a dollar. That kind of gesture always seems to be received well.
What about the Comcast's outlook? Well, it's going to be a competitive year. Comcast says it expects between 8 and 10 percent revenue growth. Wall Street's consensus expectation was higher, about 11 percent, and last year the company brought in 24 percent growth. The company's strategy includes a new lower cost (and lower speed) "economy broadband" package; and it's pushing its additional high def TV offerings.
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