Comcast gains amid upbeat cash flow, broadband growth concerns
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Comcast (NASDAQ:CMCSA) is 2.1% higher on a choppy trading day after its generally upbeat earnings report, where the company topped analyst expectations for EPS and revenue and committed to higher dividends and more buybacks.
The fourth quarter wrapped up a full year where the company logged record revenue, EBITDA, EPS and free cash flow, it said.
Revenues rose nearly 10% to $30.3 billion. By segment: Cable Communications, $16.4 billion (up 4.5%); NBCUniversal, $9.34 billion (up 25.6%); Sky, $5.1 billion (down 2.4%).
In its biggest segment, strength in Broadband (up 8.5% to $5.86 billion) and Business services (up 11.5% to $2.34 billion) led the gains, making up for drops in Video (down 1.2% to $5.4 billion) and Advertising (down 12.5% to $818 million).
Total customer relationships there rose by 169,000, to 34.2 million; residential up by 153,000, and business up by 17,000.
Broadband customer net adds rose by 212,000, against video customer net losses of 373,000 and voice net losses of 176,000.
A long-awaited update on NBCUniversal's Peacock streaming service says it topped 24 million monthly active accounts in the U.S. It had previously pointed to sign-ups (in July it reported 54 million), and 20 million MAUs as of the second quarter of 2021.
Analysts liked the free cash flow while raising more flags about subscriber growth concerns.
Wells Fargo noted that the 212,000 broadband net adds trailed sell-side expectations: It was "better than feared" but compared badly with the 350,000 net adds in the fourth quarter of 2018, and the 442,000 in 2019. Free cash flow was a big beat, though, analyst Steven Cahall notes. He rates it Underweight with a $46 price target.
And New Street (Buy rating, $65 target implying 31% upside) pointed to studios and theme parks numbers that "blew away expectations" while acknowledging that the broadband results won't allay concerns that higher competition is weighing on future growth.
Check out the company's earnings call presentation for more details.