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Street Cheers Comcast's Q4 Earnings Beat

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Street Cheers Comcast's Q4 Earnings Beat

Comcast Corporation (NASDAQ: CMCSA) reported a top-and-bottom line in its fourth-quarter earnings print, which showed the company is shifting its business away to better position itself against cord cutting and a competitive environment.

What Happened

Comcast said it earned 64 cents per share in the quarter on revenue of $27.846 billion versus expectations of 62 cents per share and $27.57 billion. Cable Communications revenue rose 5.2 percent from a year ago to $14.13 billion as net customer adds in the quarter were 258,000 and high-speed internet customer net adds were 351,000.

Cable Networks (excluding Olympics) revenue rose 8.9 percent from last year to $2.892 billion, Broadcast Television revenue (excluding Olympics and Super Bowl) rose 3.7 percent to $3.099 billion, Filmed Entertainment revenue rose 14 percent to $1.976 billion, and Theme Parks revenue rose 3.5 percent to $1.513 billion.

The earnings report sent shares of Comcast higher by more than 6 percent to trade at $37.13 at time of publication.

Why It's Important

Bears remain focused on continued cord cutting trends and a tougher broadband environment due to telecom fiber and 5G wireless offerings, Guggenheim's Mike McCormack said in a research report.

Encouragingly, Comcast's print shows the company is moving away from the triple/quad play towards single pay broadband. In fact, single play adds expanded from 439,000 in 2017 to 878,000 in 2018. Broadband adds improved from the 1.036 million net adds in 2017 to 1.262 million while at the same time Cable margins improved more than 100 basis points.

Looking forward to 2019,  McCormack said the case for fewer video losses could be made as a transition towards single play and broadband isn't having a "detrimental impact" on cable. The continued growth in broadband will continue supporting the bull case for the cable unit throughout 2019, which is "looking quite healthy."

Related Links:

Why Strong Subscriber Growth for Hulu, Netflix Bodes Well For The Sector

Pivotal's Predictions For Media, Internet And Communications In 2019

Photo courtesy of Comcast.

Latest Ratings for CMCSA

DateFirmActionFromTo
Oct 2019Initiates Coverage OnMarket Perform
Oct 2019MaintainsBuy
Sep 2019Initiates Coverage OnBuy

View More Analyst Ratings for CMCSA
View the Latest Analyst Ratings

Posted-In: cable Guggenheim Mike McCormackAnalyst Color Earnings News Top Stories Analyst Ratings Best of Benzinga

 

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