What happened
Most stocks see their prices go up after an estimates-beating quarter is announced, but that hasn't been the case with Comcast (CMCSA -0.37%) this week.
Following the release of its first-quarter figures Thursday morning, the media giant's shares continued the downward trajectory they'd been experiencing for days. As of the close of trading Thursday, the stock was down by more than 8% week-to-date, according to data compiled by S&P Global Market Intelligence.
Image source: Getty Images.
So what
Comcast's revenue came in at just over $31 billion for the quarter, 14% over the same period the previous year and higher than the average analyst estimate of $30.5 billion. Non-GAAP (adjusted) net income also headed north, rising nearly 11% to $3.9 billion ($0.86 per share). That bettered the collective prognosticator forecast of $0.81.
So why did the share price fall?
It likely has at least something to do with one-offs, namely the Super Bowl and the Winter Olympics. Both glitzy sporting events were broadcast by Comcast's mighty NBCUniversal media unit, which as a whole (and as a result) posted a nearly 47% improvement in revenue.
To state the glaringly obvious, neither the NFL championship game nor (especially) the global athletic competition come around very often. So NBCUniversal's growth might soon return to notably more modest levels. Meanwhile, during the quarter the company's cable unit revenue didn't grow spectacularly, at less than 5%, and that for its Sky TV division in the U.K. slumped year over year.
Now what
These sorts of dynamics led two analysts to trim their price targets on Comcast stock. TD Securities' Vince Valentini shaved $5 off his level, to $65 per share, although he's maintaining his buy recommendation.
Also reducing his price target by an Abe Lincoln, Pivotal Research analyst Jeffrey Wlodarczak now pegs the stock at $57 per share; like Valentini he's keeping his buy recommendation. While he described Comcast's first-quarter performance as "overall solid in-line," and believes the shares are still attractively priced, he did express concern about the growth dynamics of the still-sizable cable business.
