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Comcast (CMCSA) Q3 Earnings Beat, Broadband User Base Rises

Comcast CMCSA reported third-quarter 2022 adjusted earnings of 96 cents per share, beating the Zacks Consensus Estimate by 7.87% and increasing 10.3% year over year.

Consolidated revenues decreased 1.5% year over year to $29.85 billion and beat the Zacks Consensus Estimate by 0.58%.

Comcast shares were up 4.89% in pre-market trading.

CMCSA shares have performed in line with the Zacks Consumer Discretionary sector, having lost 37.4% year to date.

 

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Cable Communication Revenues Up Y/Y

Cable Communication revenues increased 2.6% from the year-ago quarter to $16.54 billion, driven by increases in broadband, wireless, business services and advertising revenues. Total Customer Relationships decreased 21K to 34.368 million.

Broadband revenues grew 5.7% year over year to $6.14 billion, primarily driven by increased residential broadband customers and average rate. Total broadband customer net additions were 14K year over year to 32.177 million.

Business Services revenues were up 9.4% to $2.44 billion, driven by higher average rates, an increasing number of customers and a positive contribution from a recent acquisition.

Wireless revenues rose 30.8% to $789 million, driven by an increase in the number of customer lines. Comcast added 333K wireless lines in the reported quarter.

Other revenues decreased 0.9% from the year-ago quarter to $423 million.

Advertising revenues increased 7.2% year over year to $756 million, primarily driven by increases in political advertising. Excluding political advertising revenues, advertising revenues decreased 5.8%.

Video revenues decreased 4.4% to $5.26 billion, reflecting a decrease in the number of residential video customers, partially offset by an increase in average rates.

Meanwhile, Voice revenues were $763 million, down 12.5% year over year, due to a decline in residential voice customers.

Total video customer net losses were 561K, while total voice customer net losses were 316K.

NBCUniversal Revenues Decrease Y/Y

Revenues declined 4.3% year over year to $9.57 billion.

Media revenues decreased 22.7% from the year-ago quarter to $5.23 billion, reflecting lower advertising and distribution revenues. Excluding $1.8 billion of incremental revenues from the Tokyo Olympics in the year-ago quarter, Media revenues increased 4.4%.

Distribution revenues decreased 13.7%, reflecting the positive impact of the Tokyo Olympics in the year-ago quarter and a decline in subscribers at Comcast’s networks, partially offset by an increase in subscribers at Peacock and contractual rate increases.

Advertising revenues decreased 35.1% year over year.

Studios revenues increased 31.4% from the year-ago quarter to $3.16 billion, primarily reflecting content licensing revenues (up 16.8% year over year) and theatrical revenues (up $366 million year over year).

Theme Parks revenues jumped 42.4% year over year to $2.1 billion, reflecting higher attendance and increases in guest spending at Comcast’s parks in the United States and Japan, as well as Universal Beijing Resort.

Sky Revenues Details

Sky’s revenues decreased 14.7% year over year to $4.25 billion. At constant currency (cc), revenues decreased 0.2%.

Direct-to-consumer revenues were down 15% (down 0.4% at cc) from the year-ago quarter to $3.51 billion.

Content revenues decreased 9.1% (up 6.4% at cc) to $273 million.

Advertising revenues declined 15.9% (down 1.6% at cc) from the year-ago quarter to $471 million.

Total customer relationships increased 320K to 22.986 million in the reported quarter.

Corporate & Other Revenues

The Corporate and Other segment primarily comprises corporate operations, Comcast Spectacor and the company’s new smart TV initiatives, including Sky Glass and a joint venture with Charter to develop and nationally offer a next-generation streaming platform.

Revenues in the third quarter of 2022 were $147 million compared with $65 million in the year-ago quarter. Corporate and Other adjusted EBITDA loss was $378 million compared with a loss of $335 million in the year-ago quarter.

Operating Details

Costs and expenses in third-quarter 2022 increased 29.9% year over year to $32.27 billion.

Programming & production costs decreased 13.9% from the year-ago quarter to $8.95 billion.

Advertising, marketing and promotional expenses increased 3.6% year over year to $2.06 billion.

Adjusted EBITDA increased 5.9% from the year-ago quarter to $9.48 billion.

Segment-wise, Cable Communications’ adjusted EBITDA rose 5.4% from the year-ago quarter to $7.5 billion.

NBCUniversal’s adjusted EBITDA increased 19.5% from the year-ago quarter to $1.86 billion.

Sky’s adjusted EBITDA decreased 27.9% year over year (down 15.5% at cc) to $701 million. Sky’s operating costs and expenses decreased 11.5% (up 3.5% at cc) to $3.55 billion.

Cash Flow & Liquidity

As of Sep 30, 2022, cash and cash equivalents were $5.70 billion, up from $6.82 billion as of Jun 30, 2022.

Moreover, as of Sep 30, 2022, consolidated total debt was $92.45 billion compared with $99.54 billion as of Jun 30, 2022.

In third-quarter 2022, Comcast generated $6.9 billion in cash from operations, up from $6.3 billion reported in the previous quarter. Free cash flow was $3.4 billion in the reported quarter, down from $3.2 billion in the previous quarter.

Zacks Rank & Stocks to Consider

Currently, Comcast carries a Zacks Rank #3 (Hold).

Cumulus Media CMLS, fubo TV FUBO and AMC Entertainment AMC are some better-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cumulus Media is set to announce its third-quarter 2022 results on Oct 28. CMLS shares have been down 36.6% year to date.

fubo TV is set to announce its third-quarter 2022 results on Nov 4. FUBO shares have been down 76.2% year to date.

AMC Entertainment is set to announce its third-quarter fiscal 2022 results on Nov 8. AMC shares have been down 75.6% year to date.


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