On Mar 5, 2014, we issued an updated research report on
) - the largest cable MSO in the U.S. The company's Cable
business continues to perform well and the NBC Universal segment
is witnessing improvement. Moreover, launch of innovative
services have resulted in video subscriber additions, after a gap
of 26 quarters.
Except for the last quarter, Comcast has delivered positive
earnings surprise in the remaining three quarters last year, with
an average beat of 3.16%. The company reported mixed financial
results for the fourth quarter of fiscal 2013 with the bottom
line beat the Zacks Consensus Estimate while the top line missed
Comcast has reached an agreement to acquire the second largest
cable MSO (multi-service operator) in the U.S. -
Time Warner Cable
). The deal is expected to close within a year, subject to
regulatory approval and approvals of the shareholders of both the
companies. Comcast is expected to derive a significant $1.5
billion of operating synergy from this merger of which 50% may be
realized within the first year of the merger.
Comcast intends to enhance its offerings with the nationwide
rollout of X1 services, various home security services and
introduction of contents for multi-platform on-demand services.
The next-generation Web-capable platform, X1 offers a hybrid
IP/QAM video gateway with an advanced user interface and the
ability to port third-party apps that tie into a cloud-based
infrastructure. The upcoming X2 service is software update over
X1. This new service is a cloud-based TV guide and also includes
recommended web videos and a new mobile application.
However, a major concern for the pay-TV industry is the prolonged
macroeconomic fluctuations in the U.S. Moreover, there is little
scope for growth in the digital video customer base in the U.S.
In addition, availability of low-cost video streaming services
from the likes of
) YouTube and Hulu continue to pose significant threat to the
Currently, Comcast Corporation carries a Zacks Rank #3
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