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Comcast’s Revenue Drivers in the Fourth Quarter

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Comcast beats revenue estimate

In the fourth quarter, Comcast’s (CMCSA) revenue rose 26.1% YoY (year-over-year) to $27.85 billion, beating analysts’ estimate of $27.55 billion by 1.1%. During the quarter, Comcast’s cable communication revenue rose 5.2% YoY, boosted by high-speed Internet, business service, and advertising revenue growth. However, its video and voice revenue fell due to its residential video and voice customer count decreasing. Revenue at NBCUniversal rose 7.1% YoY, with growth in broadcast, cable network, theme park, and filmed entertainment revenue.

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Sky

Comcast’s acquisition of Sky in October contributed to its fourth-quarter revenue. Sky revenue rose 2.4% YoY to $5.02 billion, and 5.6% on a constant-currency basis, driven by higher direct-to-consumer, content, and advertising revenue.

Most of Sky’s revenue was content revenue, which increased 35.7% YoY to $363 million in the fourth quarter due to the wholesaling of sports programming, exclusive sports rights in Italy and Germany, premium sports’ and movie channels’ increased penetration of third-party pay-TV networks in the United Kingdom (EWU), and original programming monetization. Sky expanded its customer base to ~24 million last year, adding 735,000 net customers. Comcast’s Sky acquisition could help it compete with digital rivals Netflix (NFLX), Amazon (AMZN), AT&T’s (T) HBO Now, and others, which are attracting traditional cable subscribers with lower video entertainment prices.

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