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Comcast Corp. (CMCSA - Analyst Report) reported solid financial results for second-quarter 2013. The company’s triple-play voice, video and data bundled offerings are still gaining market traction. However, the company continues to lose video subscribers. Comcast currently has a Zacks Rank #3 (Hold).
Second-Quarter Results in Detail
GAAP net income for the second quarter of 2013 was $1,734 million or 65 cents per share compared with $1,348 million or 50 cents per share in the prior-year quarter. Quarterly earnings per share of 65 cents outpaced the Zacks Consensus Estimate of 63 cents. Total revenue came in at $16,270 million in the reported quarter, up 7% year over year, surpassing the Zacks Consensus Estimate of $16,022 million.
Quarterly operating costs and expenses were $10,845 million, up 6.3% year over year. However, quarterly operating income was $5,425 million, representing an annualized growth of 8.4%. Operating margin was 33.3% compared with 32.9% in the prior-year quarter. During the second quarter, Comcast repurchased 12.6 million of its common shares for $500 million and paid dividends totaling $514 million.
During the second quarter of 2013, Comcast generated $5,425 million in cash from operations compared with $5,004 million in the year-ago quarter. Consolidated free cash flow in the reported quarter was $1,948 million compared with $1,554 million in the prior-year quarter.
Cash and marketable securities, at the end of the first half of 2013, were $5,154 million compared with $12,415 million at the end of 2012. Total debt at the end of the first half of 2013, was $46,649 million compared with $40,458 million at the end of 2012. At the end of the reported quarter, the debt-to-capitalization ratio was 0.47 compared with 0.43 at the end of 2012.
Cable Communications Segment
Quarterly total revenue was $10,467 million, up 5.8% year over year. Operating cash flow was $4,335 million, up 5.7% year over year. Within this segment, Video revenues were $5,175 million, up 2.7% year over year. High-Speed Internet revenues were $2,569 million, up 8% year over year. Voice revenues were $910 million, up 2.4% year over year. Advertising revenues were $558 million, up 1.2% year over year. Business Services revenues were $788 million, up 26.4% year over year. Other revenues were $467million, up 12.3% year over year.
Cable TV operators are gradually loosing video subscribers to large telecom operators, such as Verizon Communications Inc. (VZ - Analyst Report) and AT&T Inc. (T - Analyst Report) and online video streaming service providers like Netflix Inc. (NFLX - Analyst Report). Despite this, Comcast has been able to slow down its video subscriber losses.
On Jun 30, 2013, Comcast had 19.986 million (up 6.7% year over year) High-Speed Internet customers; 10.327 million (up 6.9% year over year) Voice customers; and 21.776 million (down 1.6% year over year) Video customers.
In the reported quarter, Comcast lost a net 159,000 video customers compared with a net loss of 176,000 video customers in the prior-year quarter. The company added a net 187,000 High-Speed Internet customers compared with 156,000 in the year-ago quarter. Similarly, Comcast added a net 161,000 voice customers compared with 158,000 in the prior-year quarter.
NBC Universal Segment
Quarterly total revenue was $5,995 million, up 8.9% year over year. Operating cash flow was $1,191 million, signifying a 21.3% year-over-year increase. Within this segment, Cable Networks revenues were $2,413 million, up 7.7% year over year. Broadcast TV revenues were $1,732 million, up 11.6% year over year. Filmed Entertainment revenues were $1,388 million, up 12.8% year over year. Theme Parks revenues were $546 million, up 1.1% year over year.