Tags: Comcast | CMCSA | cable | stocks

Comcast Sees Opportunity in Cable

By    |   Monday, 29 Aug 2011 11:15 AM

A few years ago, speculation in media circles had it that Comcast (CMCSA), the nation’s largest cable operator, was in trouble. The fear was that telephone companies were encroaching on its territory. But now Comcast is pushing back, building its base of Internet and telephone customers. The company now provides phone service to about 18 percent of the homes in its territory, according to Morningstar data.

Comcast also increased its Internet subscriber count by 144,000, or 22 percent, in the second quarter from a year earlier. Comcast has an integrated network that will be difficult for the phone companies to match. The acquisition of 51 percent of NBC Universal earlier this year gives the cable provider, which already had a presence in the TV station business, a bigger footprint in content.

Cable provision still provides almost two-thirds of the company’s revenue and more than 80 percent of its earnings before interest, taxes, depreciation and amortization (EBITDA).

Comcast’s cable revenue gained 5.6 percent in the second quarter from a year earlier. While that figure represents a deceleration from the first quarter, it’s still a decent increase given the tenuous economic recovery. Meanwhile, revenue from NBC Universal jumped 17 percent.

Juicy earnings, dividend

Overall, Comcast’s revenue increased 9 percent in the second quarter from a year earlier, to $14.3 billion. Net income climbed 16 percent to $1.02 billion.

The company began paying dividends in 2008, and it recently offered a yield of 2.18 percent, nearly matching 10-year Treasury notes.

Analysts are bullish on Comcast shares, with 19 of 28 tracked by Thomson/First Call rating them a buy or strong buy.

Tuna Amobi of Standard & Poor’s has a four-star buy rating on Comcast. “After relatively encouraging 2011 second-quarter results — mainly driven by the core cable distribution operations — we remain cautiously optimistic on what thus far appears to be a somewhat seamless integration of the NBCU acquisition,” he writes.

Amobi predicts Comcast’s revenue will rise 5.4 percent for all of this year. The company next reports around Nov. 3.

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A few years ago, speculation in media circles had it that Comcast (CMCSA), the nation s largest cable operator, was in trouble. The fear was that telephone companies were encroaching on its territory. But now Comcast is pushing back, building its base of Internet and...
Comcast,CMCSA,cable,stocks
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2011-15-29
Monday, 29 Aug 2011 11:15 AM
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