Please ensure Javascript is enabled for purposes of website accessibility

Comcast's Solid Numbers Merit Your Attention

By David Smith - Updated Apr 6, 2017 at 12:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Comcast shares are slowly heading north. Why not take a close look at the company?

Comcast (Nasdaq: CMCSA), the big bear of the cable industry, has turned in second-quarter results that, depending on how you look at them, were either encouraging or softer than you would have liked.

I'll take the former approach, because, unlike some folks, I seem to have difficulty always taking a "half-empty" approach to the company -- and that's after a decade of following it closely. Indeed, from my perspective, its trajectory is decidedly upward.

For instance, its earnings slipped by $0.02 year over year to $0.31 per share. But the most recent quarter included $59 million of pre-tax costs -- $0.02 per share after tax -- related to the pending acquisition of a majority interest in General Electric's (NYSE: GE) NBC Universal, a transaction that may gain regulatory approval by year's end.

Beyond that, the year-ago quarter brought with it the recognition of $137 million of income tax benefits. That found money boosted the 2009 quarter by $0.04 per share. Take away the two special items, and the 2010 per-share number would have grown 13.8% over its predecessor.

But I can tell that you want to talk about operations. You're right: Video customers fell by 2.8% in the quarter. But digital video subscribers grew by 9.7%. That is a far more important metric for judging the strength of a video offering in today's world. Beyond that, high-speed data customers increased by 7.3%, and voice customers expanded by 16%. That shows how subscribers are availing themselves of Comcast's digital telephony service.

And there's more to the positive trends at the company. For instance, at Comcast Business Services, which is intended for smaller business and is really just getting started, year-over-year revenue grew by a healthy 54%, while advertising revenue increased by 23% -- at a time when advertising at The New York Times, for instance, remains essentially flat. Lastly, the programming segment's revenue expanded by 18.1%.

Next week, Time Warner Cable (NYSE: TWC), the second-largest of the cable operators, and Cablevision (NYSE: CVC) will both report on Wednesday, along with one of their key competitors, satellite video provider DirecTV (Nasdaq: DTV). I suspect we'll see many of the trends already exhibited by Comcast repeated at the other two cable operators.

In the meantime, I'd suggest that Fools pay careful attention to Comcast. The media industry isn't unanimously down and out.

Fool contributor David Lee Smith doesn't own shares in any of the companies named in this article. He does welcome your questions, comments, or golf tips. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$77.14 (2.95%) $2.21
DIRECTV, LLC Stock Quote
DIRECTV, LLC
DTV.DL
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$38.96 (2.10%) $0.80

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
373%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.