Broadband Internet, Fee Hike Boosts Comcast’s Revenues

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Comcast

Comcast (NASDAQ:CMCSA) released its Q4 earnings on January 24, with the company’s consolidated revenues growing by 4.2% y-o-y to around $21.9. However, adjusted EBITDA was about flat at $6.75 billion. Below we discuss the key takeaways from the results.

  • Despite the loss in video subscribers, which declined by 33,000 q-o-q to 22.36 million, cable communication video revenue grew by 1.5% to $5.73 billion as its customers subscribed to additional services. As a result, monthly average revenue per customer for cable videos improved from $83.60 last year to $85.50 in Q4. This indicates that company’s cable TV video services, which are also clubbed in the Xfinity Triple Play bundle, remain popular among its subscribers.
  • Comcast has improved its footprint in the broadband internet industry in the last few years by launching new services such as xFi and Xfinity mobile. During the quarter, the company added 318,000 new residential high-speed internet customers and 32,000 business service customers. As a result, broadband revenues grew by 8.4% to $3.77 billion as the internet subscriber base swelled to 25.87 million.
  • A decrease in political advertising revenue negatively impacted ad revenues, which decreased 12.4% to $629 million.
  • NBCUniversal’s revenues grew by 3.9% to $8.78 billion this quarter due to a lack of major events. While cable network revenues grew by 7.5% to $2.69 billion due to contractual rate increases and contract renewals, broadcast revenues grew by 4% to $2.96 billion as higher retransmission consent fees boosted distribution revenues by 45%.
  • Theme Park revenues grew once again to $1.46 billion (8.7% growth y-o-y), reflecting higher per capita spending. The company continues to invest in the theme park business as it is considered a key growth driver in the future.
  • Filmed Entertainment revenue decreased 5.2% y-o-y to $1.73 billion due to lower theatrical revenue compared to last year.

We are in the process of updating our model. Our $41 price estimate for Comcast is in line with the current market price.

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