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Comcast (CMCSA) Tops Q2 Earnings, Revenue Estimates

Zacks Equity Research

Comcast Corp. CMCSA reported strong financial results in the second quarter of 2016 wherein both the top and the bottom line surpassed the respective Zacks Consensus Estimate. Importantly, the company witnessed impressive subscriber gains for high-speed data and voice services whereas its video subscriber loss was curtailed significantly. Comcast currently carries a Zacks Rank #3 (Hold).  

GAAP net income in the second quarter of 2016 came in at $2,028 million or 83 cents per share compared with $2,137 million or 84 cents in the prior-year quarter. However, quarterly earnings per share of 83 cents were a penny ahead of the Zacks Consensus Estimate.

Comcast Corporation (CMCSA) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Quarterly total revenue was $19,269 million, up 2.8% year over year and ahead of the Zacks Consensus Estimate of $19,043 million.

Operating costs and expenses totaled $12,814 million, up 2.7% year over year. Operating income came in at $4,066 million, down 1% year over year. Operating margin was 21.1% compared with 21.9% in the year-ago quarter. During the second quarter, Comcast repurchased 18.4 million common shares for $1,100 million and paid dividends of $670 million.

In the second quarter of 2016, Comcast generated $6,455 million of cash from operations compared with $6,266 million in the year-ago quarter. Free cash flow was $1,420 million compared with $1,501 million in the prior-year quarter.

Cash and marketable securities, at second-quarter 2016 end, were $4,665 million up from $2,401 million at the end of 2015. Total debt at second-quarter 2016 end was $55,563 million compared with $52,621 million at the end of 2015. The debt-to-capitalization ratio at second-quarter end was 0.49 compared with 0.48 at 2015-end.

COMCAST CORP A Price, Consensus and EPS Surprise

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

Cable Communications Segment

Quarterly total revenue of $12,444 million reflected a 6% year-over-year rise. Operating cash flow was $5,048 million, up 5.7% year over year. Within this segment, Video revenues were $5,581 million, up 2.8% from the prior-year quarter. High-Speed Internet revenues totaled $3,369 million, up 8.6% year over year. Voice revenues were $893 million, down 1.1% year over year. Advertising revenues totaled $597 million, up 3.5% from the year-ago quarter. Business Services revenues were $1,360 million, up 17% year over year. Other revenues were $644 million, up 13.7% from the prior-year quarter.

As of Jun 30, 2016, Comcast had 23.987 million (up 6.4% year over year) high-speed Internet customers; 11.641 million (up 2.8% year over year) voice customers; and 22.396 million (up 0.4% year over year) video customers. The company added a net of 220,000 high-speed Internet customers and 64,000 voice customers but lost 4,000 video subscribers in the reported quarter. Comcast gained 56,000 triple-play subscribers, 53,000 double-play subscribers and 6,000 single-play subscribers, in the reported quarter.

NBC Universal Segment

Quarterly total revenue of $7,103 million reflected a 1.8% year-over-year decrease. Operating cash flow was $1,689 million, indicating a drop of 0.2% year-over-year. Within this segment, Cable Networks revenues were $2,566 million, up 4.7% year over year. Broadcast TV revenues came in at $2,128 million, down 17.3% year over year. Filmed Entertainment revenues were $1,351 million, down a substantial 40.4% from the year-ago quarter. Theme Parks revenues were $1,136 million, up a whopping 47% year over year.

Latest Developments

Comcast is taking part in the ongoing 600 MHz low-band wireless spectrum auction, which is popularly known as -- Incentive Auction – by the FCC. Notably, the company has already entered into an MVNO (mobile virtual network operator) agreement with Verizon Communications Inc. VZ. Verizon is also a participant in the Incentive Auction besides AT&T Inc. T and T-Mobile US Inc. TMUS.

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