“Fast and Furious 6,” from Comcast Corporation (NASDAQ:CMCSA)‘s Universal Pictures, led the box office for the weekend of May 31 – June 2, grossing $35.2 million according to numbers released by Hollywood.com.
Source: Hollywood.com
Comcast, as a global media and technology giant, continues to benefit from the strong sales generated from its filmed entertainment segment. “Fast and Furious 6” had generated over $173.9 million and $310.2 million overseas for Universal Pictures.
Movies are going strong for Universal
With the completion of acquisition of NBC Universal from General Electric Company (NYSE:GE) in the previous quarter, Comcast Corporation (NASDAQ:CMCSA) had a solid Q1 with strong growth. NBC Universal businesses generated 17% growth in operating cash flow. The first-quarter revenue growth (2%) was driven by the strong box office performance of “Les Miserables” and the successful release of “Identity Thief” and “Mama” in the quarter.
As of June 3, “Identity Thief” had brought in nearly $173.9 million globally ($134.5 million domestically) with a production budget of $35 million for Universal, whereas “Mama” had recorded $144.8 million worldwide ($71.6 domestically) with a production budget of $15 million. Film operating cash flow increased to $69 million from $63 million due to strong box office and lower marketing costs.
Financially sound
Overall, Comcast’s free cash flow remains solid and continues to grow, reaching record $3.1 billion with 3.3% growth for Q1, reflecting growth in consolidated operating cash flow, partially offset by higher CapEx. Comcast Corporation (NASDAQ:CMCSA) continues to strengthen its balance sheet with a medium-term leverage target of 1.5 to 2x. With these improvements, Comcast’s public debt ratings were upgraded by two major credit rating agencies recently. On the other hand, Comcast also rewarded shareholders handsomely with dividend payments of $429 million and share repurchase of $500 million in Q1.
Competition
“Now You See Me,” from Lions Gate Entertainment Corp. (USA) (NYSE:LGF), ranked behind “Fast and Furious 6” and grossed $29.2 million in revenue during the weekend, totaling $32.3 million domestically as of June 3, 2013. Amazingly, with its solid gain in 2012, Lions Gate continues to outperform the market with a whopping 84.53% gain YTD. Lions Gate continues to deliver strong revenue and has delivered three positive earnings surprises in the last three quarters.
With the success of “The Hunger Games” and controlling of the “Twilight” series through the acquisition of Summit Entertainment, Lions Gate continues to expand its share in Hollywood. Along with its popular show of “Mad Men” and the extension of its contract with current CEO Jon Feltheimer, who has been with the company for 13 years, Lions Gate is expected to grow its earnings continuously in the coming years.
Compared to Comcast Corporation (NASDAQ:CMCSA) and Lions Gate, Sony Corporation (ADR) (NYSE:SNE)’s “After Earth” has not performed that well. With the production budget of $130 million, “After Earth” raked in only $29.6 million domestically. However, its worldwide sales should get boosted once foreign box office picks up. While Sony has struggled in the past few years, its CEO claimed “Sony will change” in its 2012 annual report.
Third Point, a major shareholder of Sony, hopes that Sony can spin-off its movie and music division to unlock the value of profitable units while using the fund to improve Sony’s struggling device-manufacturing unit. Although the spin-off deal sounds profitable in the near-term, it is still unclear how Sony will respond as its board had hired investment banks to look at the proposal while its chief Kazuo Hirai has so far resisted the breaking up the company.
Bottom line
With the continuous success of “Fast and Furious 6” and the successful merger of NBC Universal, more growth is expected for Comcast Corporation (NASDAQ:CMCSA), which will continue to be a strong cash flow generator for shareholders. Don’t forget that “Fast and Furious” will not end here and the next iteration is coming up in 2014.
Nick Chiu has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article How About Investing in a “Fast & Furious” Company? originally appeared on Fool.com.
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