Stock Spotlight

Video just the tip of Comcast iceberg

Recent Price
$64
Dividend
$1.00
Yield
1.6%
P/E Ratio
21
Shares (millions)
2,556
Long-Term Debt as % of Capital
44%
52-Week Price Range
$64.22 - $49.26

Comcast ($64; CMCSa) is best known for its cable-TV service, but there's a lot more to the company than meets the screen.

At the end of March, Comcast served 22.4 million video customers, a similar amount of broadband-internet customers, and about 11.3 million voice customers. Those customers equate to a total of 27.2 million, as 69% take more than one product.

That huge subscriber count is just one example of how Comcast, which was recently added to the Focus List, doesn't do anything small.

• Earlier this month, Universal Pictures' Jurassic World became the first movie to gross more than $500 million at the box office in its first weekend.

• Comcast's February 2014 bid for Time Warner Cable ($189; TWC) made big news — as did its April 2015 retreat from that $45 billion takeover attempt in the wake of regulatory opposition.

• Comcast is the largest U.S. pay-TV company (roughly 23% of the market, according to the researcher Macquarie Capital) and either the biggest or one of the biggest broadband providers, depending on whose definition of "high speed" you use. CEO Brian Roberts also envisions Comcast as a global technology titan. In a March 2014 interview, Roberts said, "We want to be a tech company, not a wire company" and named Google ($707; GOOGL), Amazon.com ($489; AMZN), Facebook ($97; FB), and Apple ($124; AAPL) as key competitors.

Business breakdown

Last year, the Cable Communications unit generated $44.14 billion in sales, 63% of total company revenue. Video accounted for 47% of Cable Communications revenue, with most of the rest coming from internet (26%), voice (8%), business services (9%), and advertising (6%). The NBCUniversal unit (37% of Comcast revenue) operates in four segments: cable networks (37% of NBCUniversal revenue), broadcast TV (33%), films (19%), and theme parks (11%).

Comcast's diverse operational mix both within and beyond the core household-subscription business should help it keep customers' attention in a changing environment. However, even the biggest and the strongest must constantly evolve to survive.

• In May, responding to customer-service complaints, Comcast pledged to "reinvent" its customer experience, simplify billing, and hire more than 5,500 new representatives. Sounds great, but time will tell whether management adjusts the sales-focused approach of its customer-service staff.

• As part of its aggressive move into dynamic and addressable advertising, Comcast in June agreed to acquire Visible World, a targeted-advertising company. This and other investments in "ad-tech" should attract advertisers looking for a clearer, more direct path to high-potential customers.

Comcast has responded aggressively to changes in the way people consume video, with its X1 system, internet initiatives, and advertising-related investments like those mentioned above. If the company keeps adapting to new TV-viewing trends, consensus targets for per-share-profit gains of 4% this year and 14% next year could prove conservative.

You can obtain an annual report for Comcast Corp. at One Comcast Center, Philadelphia, PA 19103, (215) 286-1700, www.comcast.com.


 

Comcast

 
Quarter
Per-Share Earnings
Sales Change
Quarterly Price Range
P/E Ratio Range
Mar '15
$0.79
vs.
$0.68
3%
$60.70
-
$52.45
21 - 18
Dec '14
0.77
vs.
0.66
5%
59.30
-
49.33
21 - 17
Sep '14
0.73
vs.
0.65
4%
57.49
-
52.52
21 - 19
Jun '14
0.75
vs.
0.65
4%
54.26
-
47.74
21 - 18

 
Year (Dec.)
Sales (Bil.)
Per-Share Earnings*
Per-Share Dividend
52-Week Price Range
P/E Ratio Range
2014
$68.78
$2.93
$0.62
$59.30
-
47.74
20 - 16
2013
64.66
2.47
0.50
52.09
-
37.21
21 - 15
2012
62.57
1.93
0.43
38.22
-
24.28
20 - 13
2011
55.84
1.58
0.39
27.16
-
19.19
17 - 12

 
Quadrix Scores†
Overall
Momentum
Value
Quality
Financial Strength
Earnings Estimates
Performance
92
87
68
88
75
26
78

* Earnings exclude special items.
NM Not Meaningful.
† Quadrix® scores are percentile ranks, with 100 the best.
e Dividend and yield estimated.

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Video just the tip of Comcast iceberg

Wednesday, July 22, 2015

Comcast ($60; CMCSa) is best known for its cable-TV service, but there's a lot more to the company than meets the screen.

At the end of March, Comcast served 22.4 million video customers, a similar amount of broadband-internet customers, and...

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