Comcast Corporation (CMCSA +0.50%) stock jumped 8.8% through noon ET after soundly beating analyst targets for Q1 sales and earnings.
Heading into the report, analysts expected Comcast to earn only $0.72 per share on sales of $30.4 billion. In fact, Comcast earned $0.79 per share on $31.5 billion in sales, beating on both top and bottom lines.
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Comcast Q1 earnings
Year over year, Comcast grew revenue 5% despite continued losses of broadband subscribers -- but despite the stock being up today, that's actually about where the good news ends.
On earnings, Comcast "beat" analysts' expected non-GAAP number (although even this number was down 27.5% year over year). Meanwhile, earnings calculated under generally accepted accounting principles (GAAP) slid significantly: GAAP profits came in at $0.60 per share for the quarter, down 33% year over year. And free cash flow was only $3.9 billion, down 28%.
Most of the growth Comcast did enjoy came not from the cable or broadband segments, but from selling wireless connections, Peacock subscriptions, and theme park tickets. Domestic broadband customers fell by 65,000, but the wireless customer count grew by 435,000. Peacock subscribers grew 12% -- and price hikes at that division boosted revenue 71%.
Theme park revenue surged 24%.
NASDAQ: CMCSA
Key Data Points
What's next for Comcast stock?
Long story short, the business still looks in decline to me -- although there are bright spots. The best news for investors is that Comcast stock looks so cheap today, trading for just 5.5 times trailing earnings and paying a 4.5% dividend yield, that it might be worth owning despite the declining profits and free cash flow.
Factor in an 11 forward P/E, earnings growth of about 50% forecast over the next five years after bottoming in 2026, and I have to admit: The valuation intrigues.
