Comcast Corp. (CMCSA - Analyst Report) reported mixed financial results for the fourth quarter of 2014. The company’s net earnings met the Zacks Consensus Estimate while total revenue outpaced the same.
GAAP net income in the fourth quarter of 2014 came in at $1,925 million or 74 cents per share compared with $1,913 million or 72 cents per share in the prior-year quarter. Further, quarterly adjusted earnings per share of 77 cents were exactly in line with the Zacks Consensus Estimate.
Comcast Corporation - Earnings Surprise | FindTheBest
Meanwhile, total revenue stood at $17,732 million, up 4.8% year over year and also above the Zacks Consensus Estimate of $17,678 million.
Quarterly operating costs and expenses totaled $11,855 million, up 5.1% year over year. However, quarterly operating income came in at $3,787 million, representing annualized growth of 3.8%. Operating margin was 21.4% compared with 21.6% in the prior-year quarter. During the fourth quarter, Comcast repurchased 36.8 million worth of common shares for $2 billion and paid dividends of $580 million.
In the fourth quarter of 2014, Comcast generated $5,877 million of cash from operations compared with $5,645 million in the year-ago quarter. Free cash flow stood at $1,694 million as against $1,435 million in the prior-year quarter.
Cash and marketable securities, at the end of 2014, were $4,512 million against $5,291 million at the end of 2013. Total debt at the end of 2014 was $48,234 million as against $44,567 million at the end of 2013. The debt-to-capitalization ratio was 0.45 compared with 0.47 at end 2013.
Cable Communications Segment
Quarterly total revenue of $11,313 million reflected a 6.1% year-over-year rise. Operating cash flow was $4,684 million, up 6.3% year over year. Within this segment, Video revenues were $5,187 million, up 1.3% from the prior-year quarter. High-Speed Internet revenues totaled $2,912 million, up 9.9% year over year. Voice revenues were $916 million, down 1.4% year over year.
Advertising revenues were $717 million, up 18.9% from the year-ago quarter. Business Services revenues were $1,058 million, up 20.8% year over year. Other revenues were $523 million, up 8.3% from the prior-year quarter.
As of Dec 31, 2014, Comcast had 21.962 million (up 6.2% year over year) High-Speed Internet customers; 11.193 million (up 4.4% year over year) Voice customers; and 22.383 million (down 0.9% year over year) Video customers.
The company added a net of 375,000 High-Speed Internet customers compared with 379,000 in the year-ago quarter. Similarly, Comcast gained 123,000 Voice customers as against 227,000 in the prior-year quarter. It also gained 6,000 video subscribers compared with 46,000 in the year-ago quarter.
In the reported quarter, Comcast gained 114,000 triple-play subscribers and 100,000 double-play subscribers but lost 35,000 single-play subscribers.
NBC Universal Segment
Quarterly total revenue of $6,615 million reflected a 2.3% year-over-year rise. Operating cash flow was $1,427 million, indicating a 6.6% year-over-year increase. Within this segment, Cable Networks revenues were $2,327 million, up a nominal 0.1% year over year. Broadcast TV revenues came in at $2,335 million, up 4.8% year over year. Filmed Entertainment revenues were $1,295 million, highlighting a reduction of 10.6% from the year-ago quarter. Theme Parks revenues were $735 million, up 29.9% year over year.
Shareholders’ Wealth Enhancement
The board of directors of Comcast has increased its annualized dividend rate by 11.1% to $1.0 per share. Accordingly, the board of directors declared a quarterly cash dividend of 25 cents a share on its common stock, payable on Apr 22, 2015 to shareholders of record at the close of business as of Apr 1, 2015.
Furthermore, the board of directors also raised its stock repurchase program authorization to $10 billion. Comcast plans to repurchase $4.25 billion worth of outstanding common stocks during 2015, subject to market conditions.
Latest Development
Comcast is currently awaiting regulatory approval for its proposed merger with Time Warner Cable Inc. (TWC - Analyst Report). In Feb 2014, the company had entered a transaction with Time Warner Cable to acquire the latter in an all-stock deal valued at around $45.2 billion. In Apr 2014, Comcast reached an agreement with Charter Communications Inc. (CHTR - Analyst Report) to divest 3.9 million subscribers as a strategic decision to ease regulatory concerns over the merger deal.
The proposed merger is expected to face tough scrutiny and close monitoring by the Federal Communications Commission (FCC). DISH Network Corp. (DISH -Analyst Report) has raised several issues against this merger. The deal is likely to get a decision in the first half of 2015. Comcast currently has a Zacks Rank #3 (Hold).
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