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Comcast’s 3Q15 Revenues Met Wall Street Expectations

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Revenues meet Wall Street expectations

On October 27, 2015, Comcast (CMCSA) announced 3Q15 results. The company posted revenues of $18.7 billion, a growth of 11.2% over the corresponding quarter last year. Comcast’s revenues in 3Q15 were in line with the consensus Wall Street analyst estimates of $18 billion. The primary growth drivers for Comcast’s revenues in 3Q15 were the high speed Internet (or HSI) and business services segment in the Cable Communications business. Another revenue growth driver for Comcast in 3Q15 was the strong performance in the films and parks division at NBCUniversal.

Comcast’s operating income in 3Q15 was $4 billion, an increase of 6.9% over the same quarter last year.

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Comcast posted EPS (earnings per share) of $0.80 in 3Q15, which met consensus Wall Street expectations. The company’s EPS in 3Q15 fell by 19.2% from $0.99 in 3Q14. The company’s EPS in 3Q14 included a $724 million or $0.28 benefit of income tax adjustments. Excluding this adjustment, Comcast’s EPS in 3Q15 rose by 9.6% from the corresponding quarter last year.

The company had an operating cash flow (or OCF) of $6.2 billion, an increase of 8.4% over 3Q14. The OCF rose by 7% over 3Q14, excluding the $77 million transaction-related costs incurred for the terminated acquisition of Time Warner Cable (TWC). Charter Communications (CHTR) is now going to acquire Time Warner Cable. Comcast had an FCF (free cash flow) of ~$2.7 billion, an increase of 6.8% over 3Q14.

Dividends, share repurchase, and reclassification of Comcast stock

Comcast announced a $0.25 dividend per share for 3Q15. During the quarter, Comcast repurchased 37.1 million shares for $2.2 billion. On its earnings call, Comcast also announced the decision to reclassify each share of the Comcast Class A special common stock to one share each of Comcast Class A common stock. Comcast has stated that this decision aims to:

  • avoid “investor confusion caused by having two classes of publicly traded stock”
  • improve trading liquidity

You can get diversified exposure to Comcast by investing in the PowerShares QQQ TrustSeries 1 ETF (QQQ), which holds 2.5% of the stock. The same ETF also holds 8.2% of Microsoft (MSFT).

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