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How Comcast’s Cable Business Performed in 4Q17

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Cable revenue drivers

Comcast’s (CMCSA) Cable segment, which makes up more than 60% of the company’s total revenue, is set to maintain mid-single-digit growth in 4Q17.

Strong growth in both the high-speed Internet and business services units, which also form part of the Cable segment, may help the segment to maintain stable growth. The growing popularity of the Xfinity Mobile service Comcast launched in May last year may further lend support to the company’s Cable unit in 4Q17 and beyond.

In the graph above, we can see the Cable segment’s revenue growth over the last five quarters. During this period, revenue has risen at a CAGR (compound annual growth rate) of 1.3%.

In 3Q17, the company’s Cable segment’s revenue rose 5.1% YoY (year-over-year) to $13.2 billion buoyed by growth in the high-speed Internet and business services divisions. The divisions generated combined revenue of $5.3 billion, a rise of 10% YoY.

In the last three quarters, both units have produced combined total revenue of nearly $15.6 billion at a quarterly average of $5.2 billion each quarter. In 2016, they ended the year with nearly $19 billion in revenue.

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Headwinds in 2017

The Cable segment generally collects revenue from residential and business customers. For this reason, upbeat US economic data driven by 17.5% monthly growth in new home sales in November 2017 may allow the company to post solid Cable business growth in upcoming quarters.

On the downside, the company’s video unit, which forms part of its Cable segment and contributes the bulk of its revenue, has continued to be affected by increased cord-cutting activity. The higher availability of low-cost video streaming services from Netflix (NFLX), Amazon Prime Video (AMZN), and Hulu could continue to dent video subscriber growth going forward. The impact of the hurricane in September may also have hurt Comcast’s 2017 Cable business.

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