uploads///Revs and OIBDA generation

Why Comcast’s Cable Segment Is a Key Growth Driver


May. 15 2016, Updated 6:38 p.m. ET

Comcast’s growth story in fiscal 1Q16

The media industry is vertically integrated. Content producers are often aggregators. Media conglomerates like Comcast (CMCSA) have a strong presence in the whole value chain of the media industry through their role as content producers, aggregators, and content distributors.

In 1Q16, Comcast had revenues of $18.8 billion, an increase of 5.3% over 1Q15. Comcast had an OIBDA (operating income before depreciation and amortization) of $6.4 billion in fiscal 1Q16, up 6.9% year-over-year. The company posted EPS (earnings per share) of $0.87 in fiscal 1Q16, which exceeded consensus Wall Street analyst estimates by 10.1%. Comcast had FCF (free cash flow) of $2.8 billion in fiscal 1Q16.

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Comcast Cable

The core growth drivers of Comcast’s performance in fiscal 1Q16 were its high-speed Internet and video services and Comcast’s rapidly growing business services segment. Comcast Cable provides triple play services (high-speed Internet, voice, and video) similar to Charter Communications (CHTR) and Time Warner Cable (TWC), which also provide such services.

Comcast Cable generated 65% of the company’s revenues and 77% of Comcast’s OIBDA in 1Q16, as the above chart shows.

Comcast’s video business results exceeded results from the past nine years in 1Q16. Video customers grew by 53,000 in fiscal 1Q16. We’ll look into Comcast’s video business in detail in a later part of this series. Comcast’s high-speed Internet (or HSI) services segment saw its best results in four years with its HSI customers growing by 438,000 in fiscal 1Q16.

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Comcast’s NBCUniversal

Comcast’s NBCUniversal’s primary growth drivers were its Broadcast Television, Cable Networks, and Theme Parks segment. NBCUniversal generated 35% of Comcast’s revenues and 23% of its OIBDA in fiscal 1Q16.

In this series

In this series, we’ll discuss the primary growth drivers for Comcast Cable. We’ll also look at valuation metrics and analyst recommendations for Comcast. Comcast makes up 3.0% of the PowerShares QQQ ETF (QQQ). QQQ has 4.6% exposure to the television sector and holds 0.66% of FOXA.


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