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How Comcast 'Stole' NBCUniversal From General Electric

For Comcast, Cohen of Bank of America predicts that owning NBCUniversal in full will add about 11% to the company's overall earnings per share this year and a similar amount in coming years. The key, Cohen notes, is that NBCUniversal's operating performance is now definitively on the upswing.

In 2012, NBCUniversal revenue rose nearly 13% to over $23 billion in annual sales, while operating cash flow grew over 9% to $4.1 billion. Those figures, in addition to low cost financing arrangements and potential divestitures by Comcast of its minority interest in A&E and a sale of spectrum to Verizon (VZ) for about $2.3 billion may help to keep the company's balance sheet in check, according to Cohen.

General Electric shareholders are unlikely to complain about Tuesday's deal or the full disposal of its long-held media empire, given the already unwieldy size and scope of the conglomerate.

In fact, the first leg of the NBCUniveral deal came at a time when GE was selling assets in order to stabilize its financial services arm and repay billions in crisis-time government loans. The second leg of the NBCU stake sale may reflect the company's newfound ability to return growing amounts of capital to shareholders, as crisis-time woes fade.

On Tuesday, GE said the stake sale and a divestiture of real estate assets will cause accounting gains of $1 billion for the parent company and $900 million for GE Capital the industrial conglomerate's financial services arm. In total GE is selling $18.1 billion in assets, when real estate properties are included.

"This transaction allows us to significantly increase the cash we plan to return to shareholders in 2013, to approximately $18 billion, and to continue to invest in our industrial business," Jeff Immelt, GE Chairman and CEO, said in a statement. GE is now authorized to repurchase $35 billion in stock, with plans to buy back $10 billion in shares this year.

"We think the news affirms that the enormous self-help potential at GE is starting to be realized, and this should drive share price outperformance," Julian Mitchell, an analyst with Credit Suisse wrote of Tuesday's deal.

"GE has substantial non-core assets, and it is encouraging to see these being divested at a decent price," Mitchell added, while stressing the disposal oif NBCUniversal may not be dilutive to GE's earnings given the company's expected increase in capital returns.

Simply put, buying NBCUniversal may commit Comcast to a new phase of growth and expansion. In contrast, General Electric is selling down assets and paring its expansive operations. While shareholders in both companies may win, Comcast investors may have gotten the upper hand.

On news of the deal, Comcast shares rose over 6% to $41.40 in early Wednesday trading, a new record high for the company. General Electric shares gained over 3% to $23.34, reaching a five-year high in after-hours trading.

-- Written by Antoine Gara in New York

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