What Boosted Comcast’s Revenues in Q3 2018?



Comcast beats revenues

Comcast (CMCSA) posted revenues of $22.1 billion in Q3 2018, well above the consensus estimate of $21.8 billion. In the third quarter, the top line also grew 5% YoY from $21.1 billion in Q3 2017 driven by its improved business segments. While cable communications’ revenues improved 3.4%, NBCUniversal revenues increased 8.1% YoY in Q3 2018.

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Revenue drivers

In Q3 2018, the cable communications business revenues increased 3.4% YoY on the back of growth in high-speed Internet, business services, and advertising revenue. However, video and voice revenues fell 2.9% and 3.1% YoY in the third quarter due to a decline in residential video and voice customers in the quarter.

Revenue at NBCUniversal also grew 8.1% YoY in the quarter, although the theme parks business didn’t do well and declined 1.4% YoY. The broadcast, cable networks, and filmed entertainment divisions each reported improved revenue growth in Q3 2018. Under the NBCUniversal segment, cable networks accounted for $2.88 billion in total revenue, while broadcast TV accounted for $2.45 billion in total revenue. Films including Jurassic World: The Fallen Kingdom and Mamma Mia! Here We Go Again added $1.82 billion to the total revenues. The company’s theme parks revenue declined due to unfavorable weather in Japan.

Revenues to grow after Sky acquisition

Comcast completed the acquisition of Sky in the third quarter to help the company expand its global footprint. The Sky deal is also expected to boost Comcast’s international revenue. Comcast believes that the deal will be accretive to its cash flow in the first year of completion.

The deal is expected to almost double Comcast’s customer base from 30 million to 52 million customers in the US as well as European countries such as the UK (EWU), Italy, and Germany. The Sky acquisition will give Comcast original TV productions such as Babylon Berlin and Britannia as well as sporting properties to compete with digital rivals like Netflix (NFLX) and Amazon (AMZN), which are attracting traditional cable subscribers with lower video entertainment prices. Further, Sky’s video-streaming business, Now TV, is also positioned to compete with Netflix around the world.


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