WHEN: TODAY, WEDNESDAY, MAY 12TH AT 6 & 11 PM ET
WHERE: CNBC'S "MAD MONEY W/JIM CRAMER"
Following is the unofficial transcript a CNBC EXCLUSIVE interview with Brian Roberts, Chairman & CEO of Comcast Corporation, today on CNBC's "Mad Money w/Jim Cramer."
All references must be sourced to CNBC.
JIM CRAMER, host: While we're in LA at the 2010 Cable Show, it's worth taking a look at the largest cable company in the United States. Comcast, CMCSA, to you home gamers, has over 24 million subscribers and has a tremendous acceleration in growth right now. This is a chance to drill down into the recent blowout quarter and a get a sense of what's ahead for the company, especially now that Washington seems to be on the warpath against the industry. On April 28th, Comcast reported earnings of 31 cents per share, beating the analysts' consensus estimates by a penny on revenues that rose 9.8 percent year over year. Advertising revenue was up an astounding 23 percent from the year before, and the company's taking the lead in broadband with it's high-speed Internet subscriber base growing 7 percent from the previous year, the third straight quarter where Comcast's broadband subscriber edition outstripped those of competitors ATT and Verizon. Remember, the phone companies and cable companies are involved in a knock-down, drag-out fight, a brutal war of attrition, and it looks like Comcast is winning the battle.
But there's a hitch, and it might be a big one, as just last week , we learned that broadband providers like Comcast could potentially be hit with all kinds of regulations from Washington that they weren't previously subject to, which has knocked the stock down hard after a terrific quarter. You know what I say? Let's figure out what Comcast can look like regardless of the FCC's action with the help of Brian Roberts, Comcast's CEO. Oh, and there's one more small detail. Comcast is about to acquire 51 percent stake in NBC Universal, the parent company of this network. Soon, when we mention Comcast on air, we're going to have to add that boilerplate.
Now let's talk to Brian Roberts, Comcast's chairman and CEO. Mr. Roberts...
Mr. BRIAN ROBERTS: Hey, Jim.
CRAMER: Welcome to MAD MONEY. How you been?
Mr. ROBERTS: Great to see you, Jim.
CRAMER: All right, have a seat.
Mr. ROBERTS: All right.
CRAMER: Let's get right to it. The numbers were the strongest I've seen in years. It's almost as if you've become a young growth company after being in the game for a long time. How did cable reassert itself? How did your company really kind of--I don't mind saying it--reinvent what you're doing?
Mr. ROBERTS: Well, first of all, we were going against a tough year for the economy last year, so I think the economy's helping a lot of companies. But we've invested. When we hit tough times, we wanted to increase the speed of our Internet. That's why broadband had such a great quarter. We now have the fastest and best broadband. And, of course, people want to consume more bits every day in their home, whether it's YouTube or XBox Live. Our video, with our Xfinity product, now has over 100 high-def channels. Today at the Cable
Show we announced--or yesterday, we announced we're going to go to something like 80,000 shows on demand.
Mr. ROBERTS: And we just keep trying to make our products better and our service better.
CRAMER: So you took advantage, actually, of the crisis and spent some to be able to be better?
Mr. ROBERTS: I think that you try to accelerate, widen your lead, and invest.
CRAMER: OK. One of the things that we are always looking for in companies, and it has made us on MAD MONEY feel terrific about your stock, is return of capital, particularly the initiation of a dividend. You really hadn't been a dividend-oriented company. What changed? Why have you decided to return so much money? Because it's a huge, huge dividend now.
Mr. ROBERTS: I give a lot of the credit to our new chief financial officer, Mike Angelakis. And Mike came to the company a couple years ago and saw that we had ability to continue to make those investments I just referred to and return capital to shareholders, and he reinstituted dividend. For a lot of my dad's history at Comcast, we had a dividend. When we went into the heavy investment phase of rebuilding, we curtailed it, and it's nice to be able to resume it, increase it, and, at the same time, continue to buy back our stock.
CRAMER: Now, it's possible that capital expenditures, we know have peaked, so it really could be at one of these companies that for--at each year, we might get an increase in that dividend.
Mr. ROBERTS: We hope to do that, and we are reducing capital spending. We've been growing cash flow. You put the two of those together...
Mr. ROBERTS: ...and free cash flow has really been the fastest growing part of the whole story.
CRAMER: But let's...
Mr. ROBERTS: And I think that's going to continue.
CRAMER: Let's speak about the metric. People at home are always trying to figure out what you will get to measure yourself. Is it cash flow, is it average revenue per user? Because of it's cash flow, you're up 38 percent, which is monstrous. But I need to know what you think determines whether you are doing well.
Mr. ROBERTS: Look, that's a great question, Jim, and there's no one answer. I try to do a couple things. Be consistent. That's the only way you can have a real barometer on how you think you're doing year over year. So we've consistently looked at cash flow, more emphasis today on free cash flow. Same thing with revenue per customer, not just in one product, but across the whole base. So we're up to around $108 times 24 million homes. So that has been increasing at a nice--because broadband, because of our Comcast phone...
Mr. ROBERTS: ...because of our commercial business grew 49 percent.
Mr. ROBERTS: Advertising, as you mentioned. You put all that into the pot, it's a very healthy business. We have that competition you referred to...
Mr. ROBERTS: ...but I wouldn't want to trade our business for many businesses out there.
CRAMER: I think you're right. I think you're in better shape than the other guys. Now, one of the things that happened on the conference call was pretty interesting, and I have to tell you, I was a little quizzical. Steve Burke is saying--top guy at--an old friend, actually...
Mr. ROBERTS: Our chief operating officer.
CRAMER: ...top guy, chief operating officer, he was saying that, "We don't care, we're agnostic. We welcome the iPad." I'm skeptical because you're not know as a wireless entity, and I always got a feel that like the iPad is not necessarily a friend of Comcast's.
Mr. ROBERTS: Well, I brought one with me, and let me just show you that we've developed something we call Xfinity Remote. And...
CRAMER: Developed it, revealing it now...
Mr. ROBERTS: In our Comcast labs.
CRAMER: Revealing it now because you didn't have it last night.
Mr. ROBERTS: Fifteen minutes or a half an hour ago at the Cable Show, we just unveiled this, and while everybody--and we will have video on the iPad. We thought, why not use the iPad to control your TV while you're on the Internet in your home, on the big screen. So take a look at what we just did at the Cable Show. I think it's the first time anybody'll have a chance to see this.
CRAMER: Now, is that Bluetooth? Is it like in a car? Because frankly, I don't know how I'm able to access without going and touching the box.
Mr. ROBERTS: OK. So what happens is we developed a series of--an application called--I won't get technical, called EBIF, and what that allows us to do is to change channels from our head end, if you tell us you want to change channels. Now you take your iPad or your iPhone or a Google tablet, if they make one...
Mr. ROBERTS: ...or anybody's device...
Mr. ROBERTS: ...any--Hewlett-Packard, LG, any smart device. But this is the perfect size. It doesn't get hot, it's not like a laptop.
Mr. ROBERTS: It will be in bed or in the living room with me.
Mr. ROBERTS: And we, basically can go out, you can...recommendations, you can share it with friends, you can decide what you want to watch, or you can have a queue. All the things you can do on the Web, you're wirelessly through Wi-Fi, you then click, change channels, and over the Internet, back to our head end, we'll change the channel for you in less than a second.
CRAMER: Does FiOS have it, Cablevision have it, Time Warner Cable have it?
Mr. ROBERTS: I think we're the first to announce it and I think it's going to liberate you from that cable box. One thing that's frustrated me...
Mr. ROBERTS: ...and our developers is we haven't been developing, fast enough, new products. Why? Not that we didn't want to...
Mr. ROBERTS: ...but that old cable box is five years old. So if I said when the show's over, go home and take out your PC and it's five years old, or take out your BlackBerry, five years old, you'd feel like that's dinosaur. So getting to the most state-of-the-art technology on the Web to develop but be able to still can use it as a remote, we think nobody's quite put that together. We're pretty excited by it.
CRAMER: Well, I'm not going to let you leave without asking about NBCUni. What matters to me--look, people culture, you said you're not going to Comcast the station. I don't care anything about that. But on the conference call you said it's accretive immediately. How is that possible?
Mr. ROBERTS: Well, there's--you know, not the capital spending at a content company that there is at a cable company. So whether it's from a earnings basis or a free cash flow basis, that main metric I talked about earlier...
Mr. ROBERTS: ...we believe that there will be--we've about the same leverage...
Mr. ROBERTS: ...as NBC at Comcast, the new NBC, but we do spend capital and invest in new technologies, and NBC invests in new shows, so that's their form of investment. And it will be, we believe, accretive. We think we've got a great partnership with GE. And I have to tell you, I'm more excited about the transaction, the potential transaction now then I was five months ago.
CRAMER: Well, a question, quickly, Verizon, they don't own enough of Verizon Wireless, every single call--Ivan Seidenberg, I think I can tell that he wants it. Why not buy 100 percent of us?
Mr. ROBERTS: Well, over time, I think that's how it will happen. GE has the right to put, we have the right to call. Their capital markets, it's a big transaction. But we also--we enjoy GE. They're going to add real value. They've helped us already in the capital markets. We've raised $10 billion toward the deal. It's a lot less risky than it was. We've got the capital raised. Advertising's getting better. I think it's a game-changer for Comcast, and we're really excited with the deal, Jim.
CRAMER: It does make me more bullish about the stock. More earnings is what counts, more dividends going higher. Brian Roberts, fellow Philadelphian...
Mr. ROBERTS: Yes, sir.
CRAMER: ...and chairman and CEO of Comcast, thank you very much.
Stay with Cramer.
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