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Comcast Business Services: A Consistent Driver of Growth


May. 22 2015, Updated 9:07 a.m. ET

Cable Communications Business Services

Business Services is a growth driver at Comcast (CMCSA). It’s a subsegment of the company’s Cable Communications division. At the MoffettNathanson Media & Communications Summit held on May 13, 2015, Brian L. Roberts, Comcast’s CEO and chairman, said “We have business services, which in the last 15 quarters out of 16 quarters was the first or second fastest-growing part of the company.”

Cable Communications revenue increased by ~6.3% year-over-year to ~$11.4 billion in 1Q15. The revenue from the Business Services subsegment increased by ~21.4% year-over-year to ~$1.1 billion.

This is indeed a high-growth area for the company. Comcast had close to a 25% share of the small business market during the quarter. The company had less than a 10% share in the midsize business market at the end of 1Q15.

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Other subsegments driving Cable Communications

Along with Business Services, there are other Cable Communications subsegments driving the company’s growth. For instance, the revenue from Comcast’s High-Speed Internet subsegment grew by ~10.7% year-over-year to ~$3 billion in 1Q15.

The Video subsegment also contributed to the growth of Cable Communications revenue during 1Q15. This subsegment grew by ~3% year-over-year to ~$5.3 billion, thanks to increasing take-up of the company’s advanced services by its video subscribers.

If you want diversified exposure to Comcast, consider the SPDR S&P 500 ETF Trust (SPY). SPY had ~0.8% of its portfolio invested in the company as of April 30, 2015. SPY also invested a total of ~0.5% of its portfolio in Time Warner Cable (TWC) and DIRECTV (DTV) as of that date. These three media companies also represent ~10.2% of Consumer Discretionary Select Sector SPDR Fund (XLY).


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