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Comcast (CMCSA) Tops Q2 Earnings and Revenues, Shares Up

Comcast Corp. CMCSA is the largest cable MSO (multi service operator) in the U.S. and a leading media and entertainment company.  Comcast provides basic video, digital video, high-speed broadband (Internet) and telephony services to individuals and business enterprises. In addition the company provides filmed entertainment, cable networks, broadcast TV services and operates theme parks. 

Comcast’s Cable business is doing well and the NBC Universal segment is also witnessing significant improvement. The deal to acquire DreamWorks Animation bodes well and should help fend off competition. Also, Comcast is investing heavily in its theme park business. The company has forayed into the over-the-top video delivery market with the launch of its Internet TV service “Stream” and aims to check customer churn and provide viewers with more streaming options and flexibility at breakthrough prices.

However, intensifying competitive threat, consolidation-related woes, mounting programming costs and a highly leveraged balance sheet are potent headwinds. While Comcast’s Stream TV is an attractive offering for customers, an FCC intervention into its legitimacy may jeopardize the prospects of the zero-rating plan, potentially affecting the company. Moreover, loss of NBC Universal’s programming distribution agreements, or the renewal of these agreements on less favorable terms, could affect its businesses.

Comcast currently carries a Zacks Rank #3 (Hold). The company has generated a positive average earnings surprise of 1.28% in the previous four quarters. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Comcast beats Q2 earnings estimate. Our consensus earnings estimate called for an adjusted EPS of 82 cents and the company reported adjusted EPS was 83 cents. Investors should note that these figures take out stock option expenses.

Revenue: Comcast reported total revenue of $19,269 million surpassing our estimate by $226 million.

Key States to Note: In the reported quarter, Comcast lost 4,000 video customers. At second-quarter 2016 end, the company had 22.396 million video subscribers, up 0.4% year over year. Quarterly high-speed broadband customer addition was 220,000. At second-quarter end, the company had 23.987 million high-speed Internet subscribers, up 6.4% year over year. The company also added 64,000 voice customers. At second-quarter end, the company had 11.641 million voice subscribers, up 2.8% year over year.

Stock Price: At the time of writing, the stock price of Comcast was up nearly 1.22% in the pre-market trade on Nasdaq. Clearly the initial reaction to the release is positive. The company witnessed a significant drop in video customer loss and massive increase in high-speed Internet and voice customer gain, year over year. We believe these strong results are the primary reasons for this initial positive sentiment.    

COMCAST CORP A Price and EPS Surprise

COMCAST CORP A Price and EPS Surprise | COMCAST CORP A Quote

Check back later for our full write up on this Comcast earnings report later!  Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


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