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Comcast Revenues To Keep Growing?

 

Comcast (NASDAQ: CMCSA) is a communications and media conglomerate, that primarily operates cable communications networks and has media interests that include cable and broadcast TV networks, film and media production. Below, we take a look at the company’s key businesses and how it makes money.

View our interactive dashboard analysis on Comcast Revenues: How Does Comcast Make Money?

Has 3 Operating Segments-

  1. Comcast Cable (51% of 2019E revenues): Comcast Cable is one of the largest providers of high-speed internet, video, and voice services in the United States. The company sells to residential customers under the Xfinity brand.
  2. NBCUniversal (33% of 2019E revenues) : Includes media operations such as cable networks, broadcast television, filmed entertainment, and theme parks.
  3. Sky (16% of 2019E revenues): Based in Europe, Sky operates video, high-speed internet, voice, and wireless phone services and also runs the Sky News broadcast network and Sky Sports networks.

What Are The Alternatives?

  • Comcast Cable: Comcast’s broadband business competes with the likes of Charter, AT&T, and Verizon. The video business competes with DirecTV, Charter, and Dish TV.
  • NBCUniversal: This segment competes with other media companies that own cable networks and broadcasting networks. These include Disney, CBS, Time Warner, Viacom, and News Corp.

What Is The Basis of Competition?

  • Competition in the cable space is based on the quality of service, reliability, and pricing.
  • In the media space, the quality of content and programming is a key differentiator.

Comcast’s Total Revenue has grown from $81 billion in 2016 to almost $95 billion in 2018 and is expected to stand at about $115 billion in 2 years

Revenue growth of about $20 billion over the next two years to be driven primarily by the consolidation of revenues from Sky acquisition, closed in 2018

 

(A) Revenue from Cable Communications to increase ~3% CAGR (about $3.5 billion) in the next two years, with its share of Total Revenue expected to be about 51% by 2020

  • Overall, Cable Communications revenue increased from $50.6 billion in 2016 to $55 billion in 2018, driven primarily by a higher uptake for Residential Broadband services.
  • We expect revenue to grow to about $59 billion by 2020, driven by continued growth in the Residential Broadband space and a higher uptake for its Business services.

(B) Revenue from NBCUniversal to increase ~5% CAGR (about $3.5 billion) in the next two years, with its share of Total Revenue expected to be about 34% by 2020

  • Revenues for the NBCUniversal segment expanded from $31.3 billion in 2016 to about $36 billion in 2018, driven by the Cable Networks and Broadcast divisions.
  • We expect revenue to grow to over $39 billion by 2020, driven by continued growth in broadcast and cable networks space.

(C) Revenue from Sky to increase ~$14 billion in the next two years, with its share of Total Revenue expected to be about 16% by 2020

  • Comcast closed its acquisition of Sky in 2018 and 2019 will be the first full year of consolidation.
  • We expect revenues to grow from $4.6 billion in 2018 to about $18 billion in 2019.

 

 

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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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