Comcast Corp. (CMCSA - Free Report) is the largest cable MSO (multi service operator) in the U.S. and a leading media and entertainment company. Comcast provides basic video, digital video, high-speed broadband (Internet) and telephony services to individuals and business enterprises. In addition the company provides filmed entertainment, cable networks, broadcast TV services and operates theme parks.
Comcast's decision to venture into the U.S. wireless space bodes well with its diversified business model. The company acquired 73 licenses of 600 MHz low-band wireless spectrum in the Incentive Auction. Comcast’s Cable business is doing well and the NBC Universal segment is also witnessing significant improvement. The company also expanded its theme park business through the purchase of the remaining 49% stake in Osaka-based Universal Studios Japan (USJ).
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. Another major concern for Comcast is its spiralling programming expenses. Operating costs and expenses totaled $13,431 million, climbing 8.1% year over year in the last reported first quarter of 2017. We look forward to seeing how far the company succeeds in reducing its expenses in the to-be reported quarter.
Zacks Rank: Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company has generated a positive average earnings surprise of 5.11% in the previous four quarters.
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: Comcast Beats Q2 2017 earnings estimate. Our consensus earnings estimate called for an EPS of 48 cents and the company reported EPS of 52 cents. Investors should note that these figures take out stock option expenses.
Revenue: Comcast reported total revenue of $21,165 million surpassing our estimate by $349 million.
Key States to Note: In the reported quarter, high-speed broadband customer addition was 175,000. At the end of the second quarter, the company had 25.306 million high-speed Internet subscribers, up 5.5% year over year. However, Comcast lost 34,000 video customers. At the end of the reported quarter, the company had 22.516 million video subscribers, up 0.5% year over year. It also lost 22,000 voice customers. At second quarter end, the company had 11.659 million voice subscribers, up 0.2% year over year.
Stock Price: At the time of writing, the stock price of Comcast was up nearly 1.09% in the pre-market trade on Nasdaq. Clearly the initial reaction to the release is positive. The company surpassed the Zacks Consensus Estimate for both revenues and EPS. We believe this strong result is the primary reasons for this initial positive sentiment.
Check back later for our full write up on this Comcast earnings report later!
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