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Graham Griffin
Graham Griffin
Articles (107) 

Comcast Earnings Beat Estimates Despite Theme Park Struggles

Company sees record number of new high-speed internet customers

October 29, 2020 | About:

Shares of Comcast Corp. (NASDAQ:CMCSA) saw a price jump on Thursday after the third-quarter earnings report beat analysts' estimates across the board.

The cable, internet and phone giant reported revenue of $25.53 billion, surpassing Refinitiv estimates of $24.74 billion. Despite solid revenue numbers, earnings per share were down 37.1% year over year at 44 cents. Adjusted earnings per share showed a different story, settling at a 17.7% year over year loss at 65 cents.

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Revenue saw a boost thanks in part to expanding customers across the board. Overall, the company reported a total net addition of 556,000 new customer relationships for the quarter. High-speed internet led the charge with the addition of a record-setting 633,000 new customers. The company was proud to announce that its Peacock streaming service had increased customers to 22 million, which has exceeded all expectations.

While overall revenue decreased 4.8% for the quarter, individual divisions of Comcast saw revenue increases year over year thanks to customer growth and increased customers at higher price points.

The company's cable communications division saw a 10.1% increase in revenue to $5.19 billion, up from $4.72 billion in 2019. Revenue results were negatively affected by fees related to the cancellation of sporting events. Both business and residential customers helped to bring about the positive change.

Some of the biggest losses of the quarter came from theme parks as revenue fell to $311 million. Universal Orlando Resort and Universal Studios Japan have both been operating at limited capacity, but Universal Studios Hollywood remains closed.

CEO Brian Roberts placed theme parks as "the single biggest drag on the quarter" for NBCUniversal, but Chief Financial Officer Michael Cavanaugh expects that the theme park business will return to break even for next year regardless of what happens with the park in California.

As of Oct. 29, Comcast was trading at $43.48 per share with a market cap of $198.12 billion. The GF Value Line shows that the stock is currently fairly valued.

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Top gurus invested in the stock include Steven Romick (Trades, Portfolio), Ken Fisher (Trades, Portfolio), John Hussman (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio) and Ray Dalio (Trades, Portfolio).

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Disclosure: Author owns no stocks mentioned.

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