Comcast (CMCSA) will report fourth quarter results tomorrow
morning. Management will host a call at 8:30.
Fourth quarter adjusted EPS is expected to grow 29% with revenue up 26%. It may be a somewhat hairy quarter as financial results get a boost from the acquisition of Sky plc, which was completed in October. That deal expanded Comcast's reach into Europe, gaining cable, broadband, and media businesses for the company.
Comcast is expected to post record EPS for the thirteenth straight year. Adding the NBCUniversal media business to its cable and internet business at the beginning of this decade turned out to be savvy move.
Both the Cable Communications and NBCU businesses have posted steady growth. Through the first nine months of the year, Cable Communications revenue improved 3.5% with EBITDA up 6% while NBCU revenue grew 9.6% with EBITDA up 2.5%.
Customer relationship metrics will be in focus for the Cable Communications segment. Last quarter, total customer relationships increased by 288K to 30.1 mln. Video customers fell 106K to 22 mln while high-speed internet customers grew 363K to 26.9 mln. Comcast continues to bundle its Xfinity services to fight churn.
Adjusted EPS is expected to grow 23% on 11% revenue growth this year. EPS is expected to grow 10% with revenue up 16% next year (again, boosted by the inclusion of Sky).
Last week, NBCU announced the planned launch of an ad-supported direct to consumer (DTC) streaming service in early 2020. Disney (DIS) is launching its own DTC offering later this year. Comcast still owns 30% of Hulu. Disney will take a majority share of the streaming giant when it acquires Fox's (FOXA) 30% stake later this year. Comments on the company's strategic outlook will be important as the media landscape continues to evolve.
The stock more than doubled since breaking out in 2012 but has been consolidating over the last two years.
With a market value north of $160 bln, the stock trades at ~7x EBITDA or 13x EPS with a 2% dividend yield.
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