10-QPeriod: Q2 FY2013

COMCAST CORP Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 31, 2013For Securities:CMCSACCZ

Summary

Comcast Corporation (CMCSA) reported its second quarter 2013 financial results on July 31, 2013. The company demonstrated solid revenue growth, primarily driven by its Cable Communications segment, which saw increased demand for high-speed Internet and business services. The significant event for the quarter was the complete acquisition of NBCUniversal, finalized on March 19, 2013, which is expected to contribute significantly to future earnings. Despite a slight decrease in video customers, the company's broadband and voice services continued to expand, indicating strong customer retention and service penetration. Financially, Comcast maintained a strong operating income, supported by disciplined cost management across its segments. The company also continued its commitment to returning capital to shareholders through share repurchases and dividend increases. The integration of NBCUniversal is progressing, and its performance across cable networks, broadcast television, filmed entertainment, and theme parks shows a diversified revenue stream, with filmed entertainment showing a notable recovery. Investors can look forward to the continued growth and synergy expected from the fully integrated NBCUniversal operations.

Financial Highlights

51 data points
Beta

Revenue

$16.27B

Net Income

$1.73B

10.7% Net Margin

EPS (Diluted)

$0.33

Total Assets

$156.82B

Cash & Equivalents

$1.39B

Free Cash Flow

$1.81B

Financial Statements
Beta
Revenue$16.27B
Operating Expenses$12.84B
Operating Income$3.44B
Interest Expense$636.00M
Net Income$1.73B
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)5.26B
Shares Outstanding (Diluted)5.33B

Key Highlights

  • 1Total revenue increased by 7.0% to $16.27 billion for the three months ended June 30, 2013, compared to $15.21 billion in the prior year period.
  • 2Operating income grew by 11.6% to $3.44 billion for the three months ended June 30, 2013, compared to $3.08 billion in the prior year period.
  • 3Net income attributable to Comcast Corporation increased by a significant 28.6% to $1.73 billion for the three months ended June 30, 2013, compared to $1.35 billion in the prior year period.
  • 4The Cable Communications segment revenue increased by 5.8% to $10.47 billion, driven by strong growth in high-speed Internet and business services.
  • 5The company completed the acquisition of GE's remaining 49% stake in NBCUniversal for approximately $16.7 billion on March 19, 2013.
  • 6Diluted earnings per share increased to $0.65 for the three months ended June 30, 2013, from $0.50 in the prior year period.
  • 7Share repurchases of $1 billion were made during the six months ended June 30, 2013, and the company announced a 20% dividend increase.

Frequently Asked Questions

The Cable Communications segment showed robust performance, with revenue increasing by 5.8% to $10.47 billion for the quarter. This growth was primarily driven by a strong uptake in high-speed Internet services, which saw an 8.0% revenue increase, and a significant 26.4% jump in business services revenue. While video revenue saw a modest increase of 2.7%, this was partly offset by a 2% decline in residential video customers due to competitive pressures and rate adjustments.

The acquisition of GE's remaining 49% stake in NBCUniversal on March 19, 2013, was a major event. While specific segment results for NBCUniversal are presented, the consolidated financial statements reflect its performance. The NBCUniversal segments collectively contributed to revenue growth, with Cable Networks up 7.7% and Filmed Entertainment showing a significant turnaround with a 12.8% revenue increase. The consolidation of NBCUniversal also impacted the balance sheet, with a substantial increase in debt to finance the acquisition, and the income statement reflects its operational results.

Comcast demonstrated a continued commitment to shareholder returns. During the first six months of 2013, the company repurchased $1 billion of its Class A Special common stock. Furthermore, in February 2013, the Board of Directors approved a 20% increase in the annual dividend, signaling confidence in future cash flow generation and a desire to reward investors.

Comcast highlighted several risk factors, including intense competition across all its business lines, changing consumer behavior driven by new technologies, increasing programming expenses, regulatory oversight, economic conditions impacting advertising revenue, and the success of NBCUniversal's content. The company also noted risks related to technological development, network security, intellectual property, potential labor disputes, and the outcome of litigation.