Comcast Corp. (CMCSA - Free Report) reported strong financial results in the second quarter of 2017 wherein both the top and the bottom line outpaced the Zacks Consensus Estimate.
GAAP net income came in at $2,513 million or 52 cents per share compared with $2,028 million or 41 cents in the prior-year quarter. Quarterly earnings per share of 52 cents outpaced the Zacks Consensus Estimate of 48 cents.
Total revenue was $21,165 million, up 9.8% year over year and ahead of the Zacks Consensus Estimate of $20,816 million.
Operating income came in at $4,558 million, up 12.1% year over year. Operating margin rose to 21.5% compared with 21.1% in the year-ago quarter. Adjusted EBITDA was $7,099 million, up 10% year over year. During the second quarter, Comcast repurchased 35.2 million common shares for $1,400 million and paid dividends of $747 million.
In the second quarter of 2017, Comcast generated $5,158 million of cash from operations compared with $4,395 million in the year-ago quarter. Free cash flow, in the reported quarter was $2,219 million compared with $1,420 million in the prior-year quarter.
Cash and cash equivalents were $2,693 million, down from $3,301 million at the end of 2016. Total debt at second quarter end was $63,568 million compared with $61,046 million at the end of 2016. The debt-to-capitalization ratio at the end of the reported quarter was 0.51 compared with 0.50 at the end of 2016.
Cable Communications Segment
Quarterly total revenue of $13,122 million reflected a 3.9% rise year over year. Adjusted EBITDA was $5,320 million, advancing 5.4% year over year. Video revenues were $5,797 million, up 3.9% from the prior-year quarter. High-Speed Internet revenues totaled $3,679 million, up 9.2% year over year. Voice revenues were $856 million, declining 4.1% year over year. Advertising revenues totaled $574 million, down 2.1% from the year-ago quarter. Business Services revenues were $1,531 million, rising 12.6% year over year. Other revenues were $685 million, up 5% from the prior-year quarter.
As of Jun 30, 2017, Comcast had 25.306 million (up 5.5% year over year) high-speed internet customers, 11.659 million (up 0.2% year over year) voice customers, and 22.516 million (up 0.5% year over year) video customers. The company added a net of 175,000 high-speed internet customers but lost 34,000 video customers and 22,000 voice customers in the reported quarter. Comcast also gained 8,000 double-play subscribers and 70,000 single-play subscribers.
NBC Universal Segment
Quarterly total revenue of $8,331 million displayed a 17.3% year-over-year increase. Adjusted EBITDA was $2,071 million, exhibiting a rise of 22.6% year over year. Cable Networks revenues were $2,696 million, up 5.1% year over year. Broadcast TV revenues came in at $2,241 million, rising 5.3% year over year. Filmed Entertainment revenues were $2,155 million, up a whopping 59.6% from the year-ago quarter. Theme Parks revenues were $1,314 million, up 15.6% year over year.
Comcast has launched wireless service under the “Xfinity Mobile” brand. However, stiff pricing competition in the industry is a genuine concern. As we have seen, the four major wireless telecommunications companies – Verizon Communications Inc. (VZ - Free Report) , AT&T Inc. (T - Free Report) , Sprint Corp. (S - Free Report) and T-Mobile US Inc. (TMUS - Free Report) – have joined the unlimited postpaid data plan war in order to stand out in the crowd. In this scenario, the entry of non-wireless giants like Comcast will further intensify the competition.
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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