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Comcast Corp. Books a Massive Q4 Tax Gain

By Anders Bylund - Jan 24, 2018 at 4:37PM

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The cable and media giant recorded a $12.7 billion gain from the new tax laws in the fourth quarter. Meanwhile, cord-cutting continued in the cable TV business.

Media and communications conglomerate Comcast (CMCSA 0.14%) reported fourth-quarter results on Jan. 24. The cable giant saw an outsized tax benefit in this period, overshadowing the actual business results.

Comcast's fourth-quarter results: The raw numbers


Q4 2017

Q4 2016

Year-Over-Year Change


$21.9 billion

$21 billion


Net income

$15.0 billion

$2.3 billion


GAAP earnings per share (diluted)




Data source: Comcast.

What happened with Comcast this quarter?

  • The Trump administration's tax reform bill unleashed a $12.7 billion one-time tax benefit for Comcast, as the company's deferred tax liabilities were revalued at a much lower level. Excluding this huge tax effect and some smaller adjustments in the year-ago period, Comcast's non-GAAP earnings rose 9% to $0.49 per share.
  • Deferred tax liabilities landed at $24.3 billion on this balance sheet under the new tax accounting rules. That's down from $35.6 billion in the third quarter and $34.9 billion at the end of fiscal year 2016.
  • Among the four breakout operations under Comcast's NBCUniversal banner, three portions delivered single-digit percentage growth compared to the fourth quarter of 2016. The surge was led by 8.7% higher sales in the theme parks division and 7.5% cable networks growth. The outlier here was filmed entertainment, as Despicable Me 3 couldn't quite keep up with the success of Secret Life of Pets and Jason Bourne a year earlier. Overall, the NBCUniversal segment saw revenue rise 4% year over year to $8.8 billion.
  • That being said, the movie studio's adjusted EBITDA profits nearly doubled to $230 million while broadcast TV operations pulled in a $26% lower EBITDA haul of $194 million. Theme park profits were muted by increased marketing budgets to support the Universal Studios brand in newer markets like Japan. NBCUniversal's total adjusted EBITDA profits landed at $1.9 billion, a 6.4% annual increase.
  • The cable communications division experienced 3.4% sales growth, landing at $13.3 billion. Voice services and advertising operations saw their sales shrink year over year while video and high-speed internet services notched single-digit percentage gains. Business services led the way, with a 12% annualized revenue surge.
  • The company added 350,000 net new high-speed customers in the fourth quarter, including 317,000 residential accounts. At the same time, Comcast lost 38,000 residential video subscribers and 35,000 users of its cable-based voice services.
  • Adjusted EBITDA profits rose 4.2% to $5.4 billion in the cable communications segment.
A pair of scissors in the process of cutting a coaxial cable.

Thousands of Comcast's TV customers cut the cord this quarter. Image source: Getty Images.

What management had to say

In a prepared statement, Comcast CEO Brian Roberts highlighted record theme park attendance and internet customer additions as important growth drivers in the reported period. Then he turned to what's up next:

We are excited to have the Super Bowl on NBC, followed by the 2018 Winter Olympic Games in PyeongChang. The Olympics highlight our strengths and capabilities across Comcast NBCUniversal, as we combine the storytelling of NBC with Comcast technology to create a truly spectacular viewing experience.

Overall, we feel great about our company and our positioning as we head into the year. Our confidence in the business enables us to announce, with the support of our Board, a 21% increase in our dividend, which is our 10th consecutive annual increase. We also expect to repurchase at least $5 billion of our stock in 2018.

Looking ahead

Some of the $12.7 billion tax windfall will be returned to shareholders in the form of boosted dividends and share buybacks. To put these efforts into perspective, Comcast spent $5.1 billion on buybacks and $2.8 billion on dividend payments over the last four quarters.

Beyond that, it's largely business as usual. Promotional efforts will continue around the highly successful Japanese theme parks, focused on their Harry Potter World features. Cutting-edge DOCSIS 3.1 cable modems will let Comcast sell gigabit internet services in many markets this year, which should boost both revenue and operating margin in the cable communications segment. The movie slate includes new titles in the 50 Shades and Jurassic World blockbuster franchises, boding well for the film studio's results in 2018.

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