Comcast (CMCSA) Up 4.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Comcast (CMCSA). Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Comcast due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Comcast Q2 Earnings Beat Estimates, Revenues Miss
Comcast reported second-quarter 2024 adjusted earnings of $1.21 per share, which beat the Zacks Consensus Estimate by 9.01% and increased 7.1% year over year.
Consolidated revenues decreased 2.7% year over year to $29.6 billion and missed the Zacks Consensus Estimate by 1.26%.
Domestic broadband average rate per customer increased 3.6% and drove domestic broadband revenue growth of 3% to $6.6 billion in the second quarter.
Comcast lost 120K domestic broadband customers in the reported quarter. Moreover, it lost 419K video customers. Domestic wireless customer lines increased 20% compared with the year-ago quarter to 7.2 million, including net additions of 322K in the second quarter.
Quarter Details
Connectivity & Platforms revenues (68.2% of revenues) decreased 0.6% year over year to $20.24 billion in the reported quarter.
Residential Connectivity & Platforms revenues declined 1.4% year over year at $17.82 billion. Business Services Connectivity revenues increased 5.6% year over year to $2.42 billion.
Content & Experiences revenues (33.9% of revenues) decreased 7.5% year over year to $10.05 billion. Media revenues rose 2.1% year over year to $6.32 billion, primarily due to higher domestic distribution revenues. Peacock’s paid subscribers rallied nearly 38% year over year to 33 million. Peacock’s revenues in the second quarter jumped 28% to $1 billion.
Studios decreased 27% year over year to $2.25 billion, primarily due to lower theatrical revenues and content licensing revenues. Theatrical revenues decreased due to higher revenues from the volume and strength of theatrical releases in the prior-year period, including The Super Mario Bros. Movie and Fast X. Content licensing revenues fell primarily due to the timing of when content was made available by television studios.
Theme Parks lost 10.6% year over year to $1.97 billion due to lower revenues at the company’s domestic theme parks, attributable to lower guest attendance, as well as the negative impact of foreign currency at international theme parks.
Operating Details
Costs and expenses in the second quarter of 2024 decreased 3.2% year over year to $23.05 billion.
Programming & production costs decreased 10% from the year-ago quarter to $7.96 billion. Marketing and promotional expenses decreased 8.5% year over year to $1.92 billion.
Adjusted EBITDA decreased 0.7% from the year-ago quarter to $10.17 billion.
Total Connectivity & Platforms adjusted EBITDA gained 1.6% year over year to $8.48 billion.
Content & Experiences adjusted EBITDA was $1.94 billion, down 10.9% year over year.
Cash Flow & Liquidity
As of Jun 30, 2024, cash and cash equivalents were $6.06 billion, which increased from $6.58 billion as of Mar 31, 2024.
As of Jun 30, 2024, consolidated total debt was $98.1 billion compared with $96.5 billion as of Mar 31, 2024.
In the second quarter of 2024, Comcast generated $4.72 billion in cash from operations, which decreased from $7.84 billion reported in the previous quarter. Free cash flow was $1.33 billion in the reported quarter, which decreased from $4.53 billion reported in the previous quarter.
CMCSA paid dividends totalling $1.2 billion and repurchased 56.4 million of its shares for $2.2 billion, resulting in a total return of capital to shareholders of $3.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -7.19% due to these changes.
VGM Scores
At this time, Comcast has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Comcast has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Comcast Corporation (CMCSA) : Free Stock Analysis Report