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Comcast (CMCSA) Q3 Earnings in Line, Revenues Beat

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Comcast Corp. (CMCSA - Free Report) reported mixed financial results in the third quarter of 2016. While the top line outpaced the Zacks Consensus Estimate, the bottom line was in line with the same. Importantly, the company witnessed impressive subscriber gains in the video segment besides continuance of the strong performance in the high-speed Internet segment.

GAAP net income in the third quarter of 2016 came in at $2,237 million or 92 cents per share compared with $1,996 million or 80 cents in the prior-year quarter. Quarterly earnings per share of 92 cents were in line with the Zacks Consensus Estimate.

Quarterly total revenue was $21,319 million, up 14.2% year over year and ahead of the Zacks Consensus Estimate of $21,178 million.

Operating costs and expenses totaled $14,484 million, surging 16% year over year. Operating income came in at $4,440 million, up 11% year over year. Operating margin dropped to 20.8% compared with 21.4% in the year-ago quarter. During the third quarter, Comcast repurchased 20.8 million common shares for $1,400 million and paid dividends of $663 million.

In the third quarter of 2016, Comcast generated $4,114 million of cash from operations compared with $4,979 million in the year-ago quarter. Free cash flow was $1,371 million compared with $2,663 million in the prior-year quarter.

Cash and marketable securities, at third-quarter 2016 end, were $6,664 million up from $5,519 million at the end of 2015. Total debt at third-quarter 2016 end was $60,428 million compared with $52,621 million at the end of 2015. The debt-to-capitalization ratio at third-quarter end was 0.51 compared with 0.48 at 2015-end.

Cable Communications Segment

Quarterly total revenue of $12,557 million reflected a 6.9% year-over-year rise. Operating cash flow was $4,986 million, surging 5.5% year over year. Within this segment, Video revenues were $5,591 million, up 4.5% from the prior-year quarter. High-Speed Internet revenues totaled $3,405 million, up 8.8% year over year. Voice revenues were $878 million, slipped 2.4% year over year. Advertising revenues totaled $634 million, up 7.7% from the year-ago quarter. Business Services revenues were $1,399 million, rising 15.5% year over year. Other revenues were $650 million, up 13% from the prior-year quarter.

As of Sep 30, 2016, Comcast had 24.316 million (up 6.3% year over year) high-speed Internet customers; 11.643 million (up 2.7% year over year) voice customers; and 22.428 million (up 0.8% year over year) video customers. The company added a net of 330,000 high-speed Internet customers, 32,000 video customers and 2,000 voice customers in the reported quarter. Comcast gained 4,000 triple-play subscribers, 141,000 double-play subscribers and 72,000 single-play subscribers, in the reported quarter.

NBC Universal Segment

Quarterly total revenue of $9,178 million displayed a whopping 28.3% year-over-year increase. Operating cash flow was $2,146 million, indicating a rise of a substantial 31.5% year-over-year. Within this segment, Cable Networks revenues were $2,942 million, surging 22% year over year. Broadcast TV revenues came in at $3,087 million, soaring 56.6% year over year. Filmed Entertainment revenues were $1,792 million, dropping 7.9% from the year-ago quarter. Theme Parks revenues were $1,440 million, up a whopping 60.6% year over year.

Latest Developments

Comcast is taking part in the ongoing 600 MHz low-band wireless spectrum auction, which is popularly known as -- Incentive Auction – by the FCC. Notably, the company has already entered into an MVNO (mobile virtual network operator) agreement with Verizon Communications Inc. (VZ - Free Report) . Verizon is also a participant in the Incentive Auction besides AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) . 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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