10-QPeriod: Q3 FY2010

COMCAST CORP Quarterly Report for Q3 Ended Sep 30, 2010

Filed October 27, 2010For Securities:CMCSACCZ

Summary

Comcast Corporation (CMCSA) reported its third-quarter and nine-month results for the period ending September 30, 2010. The company demonstrated solid revenue growth, with consolidated revenue increasing by 7.3% for the quarter and 5.7% for the nine months, reaching $9.5 billion and $28.2 billion, respectively. This growth was primarily driven by its Cable segment, which saw a 6.9% quarterly revenue increase, with notable performance in high-speed Internet and phone services. Despite a slight decrease in video customers, the company's overall financial health appears robust. Operating income saw a significant 14.2% increase for the quarter and a 10.6% increase for the nine months, indicating effective cost management. A major development highlighted is the pending acquisition of NBC Universal, which is expected to close by the end of 2010 and is poised to significantly expand Comcast's media and entertainment footprint. The company also continued its capital allocation strategy through share repurchases and dividend payments.

Financial Highlights

51 data points
Beta

Revenue

$9.49B

Net Income

$867.00M

9.1% Net Margin

EPS (Diluted)

$0.15

Total Assets

$116.53B

Cash & Equivalents

$4.54B

Free Cash Flow

$1.03B

Financial Statements
Beta
Revenue$9.49B
SG&A Expenses$2.12B
Operating Expenses$7.54B
Operating Income$1.95B
Interest Expense$545.00M
Net Income$867.00M
EPS (Basic)$0.15
EPS (Diluted)$0.15
Shares Outstanding (Basic)5.60B
Shares Outstanding (Diluted)5.62B

Key Highlights

  • 1Consolidated revenue increased by 7.3% year-over-year for the third quarter to $9.49 billion and by 5.7% for the first nine months to $28.22 billion.
  • 2Operating income grew significantly, up 14.2% for the quarter to $1.95 billion and 10.6% for the nine months to $5.97 billion.
  • 3The Cable segment remains the primary revenue driver, showing a 6.9% revenue increase for the quarter, with strong performance in High-speed Internet (up 12.2%) and Phone services (up 12.6%).
  • 4Video customer base declined by 622,000 customers for the nine-month period, a trend the company anticipates will continue.
  • 5The company repurchased $900 million of its Class A Special common stock during the nine months and paid $800 million in dividends.
  • 6The significant NBC Universal transaction, expected to close by year-end 2010, was a key strategic development discussed, involving the creation of a new company where Comcast will hold a 51% controlling stake.
  • 7Cash and cash equivalents significantly increased to $4.54 billion as of September 30, 2010, from $671 million at the end of 2009, reflecting strong operating cash flow and financing activities.

Frequently Asked Questions

For the nine months ended September 30, 2010, Comcast reported consolidated revenue of $28.2 billion, an increase of 5.7% compared to the prior year. Operating income rose by 10.6% to $6.0 billion. Net income attributable to Comcast Corporation was $2.6 billion. The company also generated strong operating cash flow of $7.7 billion.

The acquisition of NBC Universal, expected to close by the end of 2010, is a transformative event. Comcast will own 51% and control of the new company, which will include NBC Universal's cable and broadcast networks, filmed entertainment, theme parks, and other assets. This transaction is expected to significantly expand Comcast's media and entertainment portfolio and revenue streams. The financial statements reflect costs associated with this transaction, and GE's remaining 49% interest will be recorded as a redeemable noncontrolling interest.

Comcast experienced a decline in its video customer base, losing 622,000 video customers in the first nine months of 2010. However, total video revenue saw a slight increase of 0.3% for the same period. This was primarily due to rate adjustments, an increase in customers taking multiple services, and upgrades to digital and advanced services, which offset the subscriber losses. The company anticipates further declines in video customers.

Comcast ended the period with a significantly stronger cash position, with cash and cash equivalents increasing to $4.5 billion from $671 million at the end of 2009. This was supported by strong operating cash flows. The company also actively managed its debt, issuing $2.4 billion in notes and repurchasing or repaying $649 million of debt. Additionally, Comcast returned capital to shareholders through $900 million in share repurchases and $800 million in dividend payments.