Factors to Consider Ahead of Comcast's (CMCSA) Q4 Earnings
Comcast Corp CMCSA is set to report fourth-quarter 2019 results on Jan 23.
The Zacks Consensus Estimate for fourth-quarter 2019 revenues is pegged at $28.22 billion, which indicates growth of 1.3% from the year-ago quarter’s reported figure.
Moreover, the consensus mark for earnings stayed at 76 cents over the past 30 days, suggesting growth of 18.8% from the figure reported in the year-ago quarter.
Notably, Comcast beat earnings estimates in the trailing four quarters, the average positive surprise being 6.9%.
Let’s see how things are shaping up prior to this announcement.
Internet & Mobile Subscriber Base Growth: A Key Catalyst
Comcast’s top line in the to-be-reported quarter is expected to have benefited from an increasing number of high-speed Internet subscribers. The company’s endeavor to improve network capacity has helped it offer higher broadband speed, thereby attracting new subscribers.
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Additionally, improving customer experience, owing to expanding Wi-Fi coverage and innovative xFi control features like the enhanced WiFi parental control (Xfinity xFi), is expected to have aided subscriber growth.
Moreover, the bundled Xfinity Flex offering with an Xfinity Internet-only subscription is expected to have attracted subscribers.
The Zacks Consensus Estimate for Cable Communication – High Speed Internet revenues is pegged at $4.81 billion, indicating 9.3% growth from the figure reported in the year-ago quarter.
The consensus mark for Net Additional Customers: High-Speed Internet Residential stands at 368K compared with 351K reported in the year-ago quarter.
Further, the company’s Xfinity Mobile is now used by more than 1.5 million customers. Strong demand for By the Gig Plan and increased uptake of the Bring Your Own Device program are expected to have expanded the user base.
Additionally, exclusive device offerings like Samsung Galaxy A70 and Google’s Pixel 4 and Pixel 4 XL for Xfinity subscribers are noteworthy.
These factors are likely to have resulted in revenue growth and lower wireless EBITDA losses in the quarter under review.
The Zacks Consensus Estimate for Cable Communication revenues is pegged at $14.76 billion, implying 4.5% growth from the figure reported in the year-ago quarter.
NBCUniversal Revenues Likely to Decline
The Zacks Consensus Estimate for NBCUniversal revenues is pegged at $9.23 billion, implying a 1.7% decline from the figure reported in the year-ago quarter.
The consensus mark for Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks’ revenues stands at $2.87 billion, $3.10 billion, $1.73 billion and $1.61 billion, respectively.
Broadcast Television revenues are estimated to remain almost unchanged from the year-ago quarter’s reported figure, while Cable Networks and Filmed Entertainment revenues are expected to decline 0.7% and 12.6%, respectively.
Filmed Entertainment is expected to have suffered from a lower number of major releases compared with the year-ago quarter.
However, Theme Parks’ consensus revenues are expected to grow 6.4% from the figure reported in the year-ago quarter. The segment is likely to have benefited from higher attendance during the holiday season.
Sky’s Robust Content to Aid Growth
Meanwhile, Comcast’s expanded international footprint, owing to the Sky acquisition, is expected to have benefited the top line in the fourth quarter. Sky’s robust portfolio is likely to have improved subscriber engagement, globally.
The Zacks Consensus Estimate for Sky revenues is pegged at $4.83 billion, implying a 6% increase from the figure reported in the previous quarter.
However, the company continues to lose video subscribers due to cord-cutting and stiff competition from virtual MVPDs. This is expected to reflect on the company’s top line in the fourth quarter.
What Our Model Says
According to the Zacks model, a company with a positive Earnings ESP along with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates.
Comcast has an Earnings ESP of +1.01% and a Zacks Rank #3, which makes us confident about an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Microchip Technology MCHP has an Earnings ESP of +1.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Apple AAPL has an Earnings ESP of +4.08% and a Zacks Rank #2.
MSCI MSCI has an Earnings ESP of +0.51% and a Zacks Rank #2.
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