Comcast resumes dividends as profit rises
Comcast Corp (CMCSA.O: Quote, Profile, Research) said it would resume annual dividend payments and set a 2009 target to complete its $7 billion stock buyback program, addressing investors’ demands to boost its beleaguered share price.
Shares of the top U.S. cable operator rose nearly 8 percent on Thursday after it also reported a 54 percent rise in fourth-quarter profit and an increase in digital video, broadband Internet and phone subscribers.
“Investors were desperate for a sign that this company is ready to return cash to shareholders,” Bernstein Research analyst Craig Moffett said. “They got that in spades today.”
By putting a defined timeline on the buyback and repurchasing $1.25 billion in the fourth quarter, Moffett said, the company clearly signaled its confidence in future cash flow prospects.
Comcast set its annual dividend at 25 cents per share, totaling about $750 million, and will pay a quarterly installment on April 30 instant payday loan. The company, whose last dividend payment was in March 1999, told analysts on a conference call that the payout would rise over time.
At Wednesday’s close, shares of Comcast had lost 39 percent of their value from a high set last July, as subscriber growth slowed due to a weaker U.S. economy and increased competition from phone and satellite companies.
That’s why in January, investment advisory firm Chieftain Capital, which held about 2 percent of Comcast shares, wrote to the board calling for the ouster of Chief Executive Brian Roberts and for dividends to resume.
Chieftain Capital’s Glenn Greenberg was not immediately available for comment.