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Can Comcast Beat Earnings Estimates in 4Q17?

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EPS estimates for 2017 and 4Q17

Leading cable and media conglomerate Comcast (CMCSA) is set to release its 4Q17 earnings results before the market opens on January 24, 2018.

According to Yahoo Finance (VZ), the company’s 4Q17 EPS (earnings per share) could improve 20% YoY (year-over-year) to $0.47 buoyed by expected growth in its overall revenue. The company expects to finish 2017 with EPS of nearly $2.07 compared to $1.79 in 2016.

In the graph above, we can see the growth of Comcast’s EPS over the last five quarters. During the period, the company’s bottom line has risen at a CAGR (compound annual growth rate) of 4.6%. Its EPS in 3Q17 were $0.55, a rise of 19.6%.

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Catalysts and headwinds for EPS growth

According to a Yahoo estimate, Comcast’s 4Q17 revenue is expected to rise 3.9% on an annualized basis to $21.9 billion fueled by strong growth momentum in its Cable segment’s high-speed Internet and business services units. The opening of new attractions in Orlando and Japan coupled with the signing of many content licensing deals and retransmission agreements could also drive the NBCUniversal segment’s revenue going forward.

Despite Comcast’s expectation of top line growth, rising programming expenses may continue to act as a headwind for the leading cable operator in 4Q17. Comcast’s programming expenses in the Cable segment in 3Q17 rose 12.4% YoY to $3.3 billion mainly due to higher retransmission consent fees, the renewal of programming contracts, and rising sports programming expenses.

The EPS estimates for Comcast’s media peers Time Warner (TWX), Disney (DIS), and Viacom (VIAB) for the upcoming quarter are $1.45, $1.61, and $0.96, respectively.

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