Comcast (CMCSA) Q4 Earnings Beat, Broadband User Base Rises

Comcast CMCSA reported fourth-quarter 2022 adjusted earnings of 82 cents per share, beating the Zacks Consensus Estimate by 5.13% and increasing 6.5% year over year.

Consolidated revenues inched up 0.7% year over year to $30.55 billion and beat the Zacks Consensus Estimate by 0.67%.

Comcast shares were down 0.37% in pre-market trading.

CMCSA shares have underperformed the Zacks Consumer Discretionary sector and its peers like Netflix NFLX in the past year. While Comcast has lost 17.2%, the sector lost 15.8% and Netflix gained 2.3%.

Comcast Corporation Price, Consensus and EPS Surprise


Comcast Corporation Price, Consensus and EPS Surprise

Comcast Corporation price-consensus-eps-surprise-chart | Comcast Corporation Quote

Cable Communication Revenues Up Y/Y

Cable Communication revenues increased 1.4% from the year-ago quarter to $16.64 billion, driven by increases in broadband, wireless, business services and advertising revenues. Total Customer Relationships decreased 71K to 34.293 million.

Broadband revenues grew 5.4% year over year to $6.18 billion, primarily driven by increased residential broadband customers and average rate. Total broadband customer net decreased 26K year over year to 32.151 million.

Business Services revenues were up 4.6% to $2.44 billion, driven by higher average rates, and an increased number of customers and positive contribution from a recent acquisition.

Wireless revenues rose 24.7% to $883 million, driven by an increase in the number of customer lines. Comcast added 365K wireless lines in the reported quarter.

Other revenues decreased 6.5% from the year-ago quarter to $424 million.

Advertising revenues increased 9.1% year over year to $892 million, primarily driven by increases in political advertising. Excluding political advertising revenues, advertising revenues decreased 7.4%.

Video revenues decreased 5.6% to $5.10 billion, reflecting a decrease in the number of residential video customers, partially offset by an increase in average rates.

Meanwhile, Voice revenues were $716 million, down 13.2% year over year, due to a decline in residential voice customers.

Total video customer net losses were 440K, while total voice customer net losses were 288K.

NBCUniversal Revenues Increase Y/Y

NBCUniversal revenues increased 5.9% year over year to $9.89 billion.

Media revenues climbed 2.6% from the year-ago quarter to $5.98 billion due to higher advertising and distribution revenues. Excluding $263 million in incremental revenues from Telemundo’s broadcast of the FIFA World Cup, Media revenues decreased 1.9%.

Distribution revenues increased 3.8%, reflecting an increase in subscribers at Peacock and contractual rate increases.

Advertising revenues increased 4% year over year primarily due to incremental revenues from the FIFA World Cup, as well as an increase in Peacock’s advertising revenues.

Studios revenues increased 13.1% from the year-ago quarter to $2.74 billion, primarily reflecting content licensing revenues (up 15.9% year over year) and theatrical revenues (up 47.3% year over year).

Theme Parks revenues increased 12% year over year to $2.11 billion, reflecting higher attendance and increases in guest spending at Comcast’s parks in the United States and Japan.

Sky Revenues Details

Sky’s revenues decreased 13% year over year to $4.42 billion. At constant currency (cc), revenues decreased 0.8%.

Direct-to-consumer revenues were down 12.2% (up 0.2% at cc) from the year-ago quarter to $3.55 billion.

Content revenues decreased 7% (up 6.5% at cc) to $304 million.

Advertising revenues declined 20.7% (down 9.6% at cc) from the year-ago quarter to $564 million.

Total customer relationships increased 129K to 23.1 million in the reported quarter.

Corporate & Other Revenues

The Corporate and Other segment primarily comprises corporate operations, Comcast Spectacor and the company’s new smart TV initiatives, including Sky Glass and a joint venture with Charter Communications CHTR to develop and nationally offer a next-generation streaming platform.

Charter collaborated with Comcast to offer a streaming platform — Xumo — on various branded 4K streaming devices and smart TVs. Charter and Comcast also rebranded Flex, the 4K streaming device Comcast licensed to the joint venture, as Xumo Stream Box, and XClass TV as Xumo TV.

Revenues in the fourth quarter of 2022 were $313 million compared with $215 million in the year-ago quarter. Corporate and Other’s adjusted EBITDA loss was $417 million compared with a loss of $481 million in the year-ago quarter.

Operating Details

Costs and expenses in fourth-quarter 2022 increased 2% year over year to $26.02 billion.

Programming and production costs decreased 0.7% from the year-ago quarter to $9.81 billion.

Advertising, marketing and promotional expenses decreased 2.3% year over year to $2.18 billion.

Adjusted EBITDA decreased 4.9% from the year-ago quarter to $8 billion.

Segment-wise, Cable Communications’ adjusted EBITDA rose 1.5% from the year-ago quarter to $7.23 billion.

NBCUniversal’s adjusted EBITDA decreased 36.3% from the year-ago quarter to $817 million.

Sky’s adjusted EBITDA decreased 26.7% year over year (down 15.1% at cc) to $340 million. Sky’s operating costs and expenses decreased 11.7% (up 0.6% at cc) to $4.08 billion.

Cash Flow & Liquidity

As of Dec 31, 2022, cash and cash equivalents were $4.75 billion, up from $5.70 billion as of Sep 30, 2022.

Moreover, as of Dec 31, 2022, consolidated total debt was $94.81 billion compared with $92.45 billion as of Sep 30, 2022.

In fourth-quarter 2022, Comcast generated $5.9 billion in cash from operations, down from $6.9 billion reported in the previous quarter. Free cash flow was $1.3 billion in the reported quarter, down from $3.4 billion in the previous quarter.

Zacks Rank & Stock to Consider

Currently, Comcast carries a Zacks Rank #3 (Hold).

Activision Blizzard ATVI is a better-ranked stock that investors can consider in the broader sector. ATVI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Activision is set to announce its fourth-quarter 2022 results on Feb 6. ATVI shares have declined 5.2% in the past year.

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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.

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