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We believe the uprise came on the back of the latest news related to the joint entry of the two major U.S. cable multi-service operators (MSOs) Comcast Corp. and Charter Communications Inc. (CHTR - Free Report) into the U.S. wireless industry. These cable companies have agreed to jointly work on their wireless services businesses to explore their opportunities, accelerate and enhance each other’s ability to participate in the national wireless marketplace. For this wireless venture, both companies will be using U.S. telecom behemoth Verizon Communications Inc.’s (VZ - Free Report) wireless network, through a Mobile Virtual Network Operator (MVNO) agreement.
The price performance of Comcast is encouraging over the past three months. Comcast’s share price inched up 3.5% outshining the Zacks categorized Cable Television industry’s 1.5% growth over the same time frame.
Comcast has also forayed into the over-the-top video delivery market by launching its Internet TV service – Stream. We believe this will help the company check customer churn, providing viewers with more streaming options and flexibility at competitive prices. Further, Comcast’s Cable business is doing well and the NBC Universal segment is witnessing significant improvement. The digital media brands are gradually gaining significant market traction especially among the young generation. Filmed Entertainment revenues were $1,981 million, up 43.2% from the year-ago quarter.
Business Services has been witnessing strong momentum and continues to represent an attractive growth opportunity for the company. Evidently, in the first quarter of 2017, Business Services revenues were $1,490 million, rising 13.6% year over year.
The company also expanded its theme park business through the purchase of the remaining 49% stake in Osaka-based Universal Studios Japan (USJ), for $2.3 billion. We believe these efforts have helped the company witness $1,118 million (up 9% year over year) revenue growth in its Theme Parks business in the first-quarter 2017.
Further, the company’s continuous efforts to strengthen its foothold in the Internet-of-Things (IoT) space and the lucrative digital media market through different deals looks good.
However, intensifying competitive threats, consolidation-related woes, lawsuits and their related fines and a highly-leveraged balance sheet remain headwinds to the upcoming results of Comcast. Online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even in volatile economic conditions.
Another major concern for Comcast is its spiraling programming expenses. Operating costs and expenses totaled $13,431 million in the first-quarter 2017, up 8.1% year over year.
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Here's Why You Should Buy Comcast Corp (CMCSA) Amid Risks
On May 16, leading cable MSO (multi service operator) and media and entertainment firm Comcast Corp. (CMCSA - Free Report) was upgraded by a notch to Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We believe the uprise came on the back of the latest news related to the joint entry of the two major U.S. cable multi-service operators (MSOs) Comcast Corp. and Charter Communications Inc. (CHTR - Free Report) into the U.S. wireless industry. These cable companies have agreed to jointly work on their wireless services businesses to explore their opportunities, accelerate and enhance each other’s ability to participate in the national wireless marketplace. For this wireless venture, both companies will be using U.S. telecom behemoth Verizon Communications Inc.’s (VZ - Free Report) wireless network, through a Mobile Virtual Network Operator (MVNO) agreement.
The price performance of Comcast is encouraging over the past three months. Comcast’s share price inched up 3.5% outshining the Zacks categorized Cable Television industry’s 1.5% growth over the same time frame.
Comcast has also forayed into the over-the-top video delivery market by launching its Internet TV service – Stream. We believe this will help the company check customer churn, providing viewers with more streaming options and flexibility at competitive prices. Further, Comcast’s Cable business is doing well and the NBC Universal segment is witnessing significant improvement. The digital media brands are gradually gaining significant market traction especially among the young generation. Filmed Entertainment revenues were $1,981 million, up 43.2% from the year-ago quarter.
Business Services has been witnessing strong momentum and continues to represent an attractive growth opportunity for the company. Evidently, in the first quarter of 2017, Business Services revenues were $1,490 million, rising 13.6% year over year.
The company also expanded its theme park business through the purchase of the remaining 49% stake in Osaka-based Universal Studios Japan (USJ), for $2.3 billion. We believe these efforts have helped the company witness $1,118 million (up 9% year over year) revenue growth in its Theme Parks business in the first-quarter 2017.
Further, the company’s continuous efforts to strengthen its foothold in the Internet-of-Things (IoT) space and the lucrative digital media market through different deals looks good.
However, intensifying competitive threats, consolidation-related woes, lawsuits and their related fines and a highly-leveraged balance sheet remain headwinds to the upcoming results of Comcast. Online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even in volatile economic conditions.
Another major concern for Comcast is its spiraling programming expenses. Operating costs and expenses totaled $13,431 million in the first-quarter 2017, up 8.1% year over year.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>