Comcast Would Have Relied On Broadband And NBC For Growth

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Comcast (NASDAQ:CMCSA) is scheduled to release its Q3 2016 earnings on October 26th, and with Pay-TV losing traction across the industry, the company would have once again relied on high-speed Internet to provide a bulk of its top line growth. Amid the prevalent trend of “cord-cutting,” companies such as Comcast are shifting their focus to broadband internet make up for the loss of subscribers in the Pay-TV domain. Even in the last quarter, while Comcast lost around 4,000 video subscribers, it gained close to 220,000 high-speed Internet subscribers. In fact, a decline of just 4,000 subscribers can be regarded as a minor achievement for the company considering the large scale migration of users from Pay-TV to online streaming services. We expect that Comcast would have managed to keep the decline in its Pay-TV base under check in the third quarter as well, by leveraging to some extent the availability of Netflix on its X1 platform.

In addition to broadband Internet, the company is likely to gain incremental revenues from its Theme Park and Broadcast Television sub-segments, thanks to the inclusion of Universal Studios Japan and the broadcast of the 2016 Rio Olympics games. In September last year, Comcast purchased 51% stake in Universal Studios Japan, the effect of which was visible in its results for the past three quarters, and it would be the same in Q3 2016 as well. Film entertainment revenues, on the other hand, are likely to have been lackluster yet again owing to the lukewarm response to much anticipated “The Secret Life of Pets” and “Jason Bourne” and others. Last quarter was disastrous for the segment mainly due to its high profile flop – “Warcraft.

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Notes:

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2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Comcast
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