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Comcast (CMCSA) Tops Q4 Earnings and Revenue Estimates

Comcast Corp.CMCSA reported strong financial results in the fourth quarter of 2016 wherein both the top line and bottom line outpaced the respective Zacks Consensus Estimate. Importantly, the company witnessed impressive subscriber gains in the video segment along with the persistence of strong performance in the high-speed Internet segment. In addition, management announced a series of measures to raise shareholders' wealth.

GAAP net income in the fourth quarter of 2016 came in at $2,296 million or 95 cents per share compared with $1,971 million or 79 cents in the prior-year quarter. However, quarterly adjusted earnings per share of 89 cents surpassed the Zacks Consensus Estimate of 87 cents.

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Quarterly total revenue was $21,025 million, up 9.2% year over year and ahead of the Zacks Consensus Estimate of $20,616 million.

Operating costs and expenses totaled $14,265 million, surging 10% year over year. Operating income came in at $4,264 million, up 6.5% year over year. Operating margin dropped to 20.3% compared with 30.8% in the year-ago quarter. During the fourth quarter, Comcast repurchased 19.3 million common shares for $1,200 million and paid dividends of $658 million.

In the fourth quarter of 2016, Comcast generated $5,743 million of cash from operations compared with $4,965 million in the year-ago quarter. Free cash flow was $2,607 million compared with $1,588 million in the prior-year quarter.

Cash and cash equivalents, at 2016 end, were $3,301 million up from $2,295 million at the end of 2015. Total debt at 2016 end was $61,046 million compared with $52,621 million at the end of 2015. The debt-to-capitalization ratio at 2016 end was 0.50 compared with 0.48 at 2015-end.

Cable Communications Segment

Quarterly total revenue of $12,843 million reflected a 7.1% year-over-year rise. Operating cash flow was $5,186 million, advancing 6.4% year over year. Within this segment, Video revenues were $5,647 million, up 4.3% from the prior-year quarter. High-Speed Internet revenues totaled $3,483 million, up 9.0% year over year. Voice revenues were $878 million, declining 2.4% year over year. Advertising revenues totaled $873 million, down 3.0% from the year-ago quarter. Business Services revenues were $1,444 million, rising 14.5% year over year. Other revenues were $668 million, up 13.6% from the prior-year quarter.

As of Dec 31, 2016, Comcast had 24.701 million (up 5.9% year over year) high-speed Internet customers; 11.687 million (up 1.8% year over year) voice customers; and 22.508 million (up 0.7% year over year) video customers. The company added a net of 385,000 high-speed Internet customers, 80,000 video customers and 44,000 voice customers in the reported quarter. Comcast gained 46,000 triple-play subscribers, 159,000 double-play subscribers and 53,000 single-play subscribers, in the reported quarter.

NBC Universal Segment

Quarterly total revenue of $8,451 million displayed a 13% year-over-year increase. Operating cash flow was $1,770 million, exhibiting a rise of a 14% year over year. Within this segment, Cable Networks revenues were $2,503 million, up 4.0% year over year. Broadcast TV revenues came in at $2,848 million, soaring 14.0% year over year. Filmed Entertainment revenues were $1,834 million, up 12.4% from the year-ago quarter. Theme Parks revenues were $1,344 million, up a whopping 32.1% year over year.

Comcast Corporation Price, Consensus and EPS Surprise

Comcast Corporation Price, Consensus and EPS Surprise | Comcast Corporation Quote

Hike in Shareholders' Wealth

Comcast has announced that its board of directors declared a two-for-one stock split in the form of a 100% stock dividend payable on Feb 17, 2017 to shareholders of record as of the close of business on Feb 8, 2017.

The company has announced that it increased its dividend by 15% to $1.26 per share on an annualized, pre-split basis, or 63 cents per share on an annualized, post-split basis. In accordance with the increase, the board of directors declared a quarterly cash dividend of 15.75 cents a share, on a post-split basis, on the company's common stock, payable on Apr 26, 2017 to shareholders of record as of the close of business on Apr 5, 2017.

Latest Developments

Comcast had taken part in the just completed 600 MHz low-band wireless spectrum auction, which is popularly known as - Incentive Auction - by the FCC. The regulator is yet to declare the name of spectrum winners. Management has decided to enter the U.S. wireless market by mid-2017.

Notably, the company has already entered into an MVNO (mobile virtual network operator) agreement with Verizon Communications Inc. VZ . Notably, Verizon was also a participant in the Incentive Auction besides AT&T Inc. T and T-Mobile US Inc. TMUS . Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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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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