Comcast: Earnings & Key Takeaways

Tom Paine

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Comcast earnings calls are extraordinarily well orchestrated (includng pre-call music), and you have to look for small nuances for signs of significant news.

The biggest headliner this quarter was video subscriber growth. Comcast added 89,000 video customers in the last quarter of 2015, which was its best quarter since the 2006. For the full year, Comcast lost 36,000 video customers, the smallest drop since 2007. At a time when other cable companies seem to be downplaying prospects for video subscribers, Comcast saw a boost which it attributes primarily to its continuing X1 rollout and reduced churn. X1 is now in 30% of video subs, and Comcast's year end target is 50%.

Comcast also plans to file as a bidder in next month’s auction of wireless spectrum, it said, emphasizing that the move was exploratory and implied no commitment. In fact, it seemed to question the feasibility of hybrid networks, specifically the technology for the handoff from cellular to WiFi.

Comcast Cable CEO Neil Smit: "We've build out the public spots based on the usage trends we see and I think it's – concerning the handoff between Wi-Fi and cellular, there is some technology out there. The question is whether you'd need to do the handoff or not and how seamless it would be. But we are looking at technology in that space as well."

CEO Brian Roberts said management often was amused by some of the acquisition rumors the media perpetrates, perhaps referring to the constant Sprint speculation and  stories such as this one floated by UK media. He gave the stock 'we're happy with what we've got but would look at opportunties' type of answer. I doubt that they are truly that unscripted, but have no idea what they
would buy at this point, though take comments in the recent past about international expansion seriously. Eventually I would expect something more significant than last year's Universal Japan deal.

Comcast cormfirned it had acquired 475 acres near Universal Orlando for $130 million. Theme parks have been a sweet spot for NBC Universal, providing continued double-digit growth, so its eager to expand in this area.

Roberts said that the company's new fund run by former CFO Michael Angelakis is "scouring the globe for smart investments."

Comcast also said its new large enterprise telecom effort was up and running, and had twenty major customers.

For the record, revenue for 2015 rose 8.5% to $19.2 billion, well ahead of estimates. Comcast's fourth-quarter profit grew 2.4% to $1.97 billion, or 79 cents a share, up from $1.93 billion, or 74 cents a share, a year ago.