Comcast Corp.
(
CMCSA
) is slated to release its fourth quarter 2011 results on
Wednesday, February 15, 2012, before the opening bell. The
currentZacks Consensus Estimate for the fourth quarter is pegged at
42 cents per share, representing an annualized growth of
24.82%.
With respect to earnings surprises over the trailing four
quarters, Comcast has outperformed theZacks Consensus Estimate in
three of the last four quarters. The average earnings surprise was
a negative 0.73%.
Third Quarter Recap
On November 2, 2011, Comcast reported its third quarter 2011
financial results. Total revenue came in at $14,339 million, up
51.1% year over year, and surpassed theZacks Consensus Estimate of
$14,220 million. Both Cable Communications and NBC Universal
segments generated solid revenue growth.
GAAP net income for the third quarter of 2011 was $908 million
or 33 cents per share compared with $867 million or 31 cents per
share in the prior-year quarter. However, quarterly EPS of 33 cents
was significantly below theZacks Consensus Estimate of 40 cents.
This was primarily attributable to higher interest charges and
taxes along with a $256 million year-over-year decline in
investment income.
Operating margin in the third quarter of 2011 was 18.4% compared
with 20.6% in the prior-year quarter.
Agreement of Estimate Revisions
In the last 30 days, out of the 16 analysts covering the stock,
one analyst increased the EPS estimate for the fourth quarter of
2011 while two reduced the same. Similarly, for the first quarter
of fiscal 2012, out of the nine analysts covering the stock, none
revised their estimate.
For fiscal 2011, in the last 30 days, out of the 13 analysts
covering the stock, one analyst raised the EPS estimate but two
slashed the same. Likewise, for fiscal 2012, out of the 19 analysts
covering the stock, three analysts increased the EPS estimates
while three moved in the opposite direction.
Magnitude of Estimate Revisions
During the last 30 days, the currentZacks Consensus Estimate was
just a penny below the previous estimate of 43 cents for the fourth
quarter of 2011 while for the first quarter of 2012; the
currentZacks Consensus Estimate was in line with the previous
estimate of 42 cents. However, for fiscal 2011, the currentZacks
Consensus Estimate was just a penny below the previous estimate of
$1.53. Likewise, for fiscal 2012, the currentZacks Consensus
Estimate was just a penny above the previous estimate of $1.87.
Earning Surprises
The currentZacks Consensus Estimates for the ongoing quarter and
the first quarter of 2012 contain 2.38% upside potential
(essentially a proxy for future earning surprises). Similarly, for
fiscal 2011 and 2012, theZacks Consensus Estimate upside potential
is 0.00% and 1.06%, respectively.
Our Recommendation
Comcast is all set to become a media powerhouse armed with its
unique control over both content and distribution after completing
the acquisition of a controlling stake in NBC Universal. The
company is also aggressively deploying theDOCSIS 3.0 (also
calledWideband ) technology to upgrade its existing customers to
high-speed network together with all digital networks.
However, we believe that Comcast is fairly valued at current
levels as the stock price has moved up by a whopping 56% last year.
Moreover, stiff competition from formidable rivals like
Time Warner Cable
(
TWC
) and other satellite operators like
DIRECTV
(
DTV
) and
DISH Network Corporation
(
DISH
) will most likely make the market highly competitive.
We maintain our long-term Neutral recommendation on Comcast.
Currently, Comcast has aZacks #3 Rank, implying a short-term Hold
rating on the stock.
COMCAST CORP A (
CMCSA
): Free Stock Analysis Report
DISH NETWORK CP (
DISH
): Free Stock Analysis Report
DIRECTV (
DTV
): Free Stock Analysis Report
TIME WARNER CAB (
TWC
): Free Stock Analysis Report
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