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Comcast (CMCSA) Lags Q4 Earnings, Top 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.

Over the last 3-4 years, the internal dynamics of the U.S. pay-TV industry have been gradually shifting from cable TV operators to large telecom operators and low-cost over-the-top service providers. Extensive network of fiber-based video services from telecom operators and the strong presence of online video streaming providers are posing significant threat to the existing cable TV business model. Meanwhile, cord-cutting has become a serious concern for major pay-TV operators. Comcast is also facing all these negatives.

Nevertheless, Comcast has significantly enhanced its digital video offerings. Accordingly its customer churn rate and average revenue per user have also improved. Comcast's focused on enhancing its offerings, its Stream TV service launch and the deployment of fiber-based 2 Gbps residential broadband Internet service - Gigabit Pro - should boost this quarter's results. Also, significant investments in its theme park business and Universal Studio's splendid performance are likely to ramp up Comcast's top as well as bottom line in the to-be-reported quarter.

Comcast currently carries a Zacks Rank #3 (Hold). The company has generated a positive average earnings surprise of 1.69% in the previous four quarters. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Comcast misses Q4 earnings estimate. Our consensus earnings estimate called for an adjusted EPS of 82 cents and the company reported adjusted EPS was a penny short of this figure. Investors should note that these figures take out stock option expenses.

Revenue: Comcast reported total revenue of $19,245 million surpassing our estimate by $455 million.

Key States to Note: In the reported quarter, Comcast gained 89,000 video customers. At 2015 end, the company had 22.347 million video subscribers, down 0.2% year over year. Quarterly high-speed broadband customer addition was 460,000. At 2015 end, the company had 23.329 million high-speed Internet subscribers, up 6.2% year over year. The company also added 139,000 voice customers. At 2015 end, the company had 11.475 million voice subscribers, up 2.5% year over year.

Stock Price: At the time of writing, the stock price of Comcast was up nearly 0.53% in the pre-market trade on Nasdaq. Clearly the initial reaction to the release is positive. The company witnessed best video customer results for a quarter in 8 years and best fourth quarter high-speed Internet customer results in 9 years. We believe these strong results are the primary reasons for this initial positive sentiment.

Check back later for our full write up on this Comcast earnings report later!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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