01—Abstract
Summary
Summary of the 10-Q filed July 27, 2016. Cited figures are marked; the original filing is the authoritative source.
Comcast Corporation (CMCSA) reported strong revenue growth in the second quarter and first half of 2016, driven by its Cable Communications and NBCUniversal segments.
The company's Cable Communications segment saw a 6.0%a revenue increase driven by high-speed internet and business services, while NBCUniversal benefited from the acquisition of Universal Studios Japan and strong performance in Cable Networks and Broadcast Television segments. Net income attributable to Comcast Corporation decreased slightly year-over-year for the quarter and half-year, primarily due to higher operating expenses and interest expenses. Financially, Comcast demonstrated robust operating cash flow and maintained a strong liquidity position with substantial availability under its revolving credit facilities.
The company announced a significant acquisition of DreamWorks Animation for approximately $3.8 billionb, which is expected to close in 2016. Comcast also continued its commitment to returning capital to shareholders through share repurchases and dividend payments.
02—Key points
Key Highlights
- Total revenue increased by 2.8% to $19.3 billion for the three months ended June 30, 2016, and by 4.0% to $38.1 billion for the six months ended June 30, 2016.
- The Cable Communications segment revenue grew by 6.0% to $12.4 billion for the quarter, driven by strong performance in high-speed internet and business services.
- NBCUniversal segments collectively saw revenue growth, boosted by the acquisition of a 51% interest in Universal Studios Japan and strong performance in Cable Networks and Broadcast Television.
- Net income attributable to Comcast Corporation decreased by 5.1% to $2.03 billion for the quarter and by 0.8% to $4.16 billion for the half-year.
- The company announced an agreement to acquire DreamWorks Animation for approximately $3.8 billion, expected to close in 2016.
- Comcast continued its capital return program, repurchasing $2.4 billion of its Class A common stock and paying dividends of $1.28 billion in the first half of the year.
- Cash flow from operations remained strong, totaling $9.38 billion for the first six months of 2016, an increase from $8.83 billion in the prior year period.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2016filed July 27, 2016Financial Statements
Q2 FY2016 against Q2 FY2015
| Line item | Q2 FY2016Q2 FY2015 | Change |
|---|---|---|
| Revenue | $19.27B$18.74B | +2.8% |
| Operating Expenses | $15.20B$14.64B | +3.9% |
| Operating Income | $4.07B$4.11B | −1.0% |
| Interest Expense | $732.00M$713.00M | +2.7% |
| Net Income | $2.03B$2.14B | −5.1% |
| EPS (Basic) | $0.42$0.42 | −1.2% |
| EPS (Diluted) | $0.41$0.42 | −2.4% |
| Shares Outstanding (Basic) | 4.84B5.00B | −3.2% |
| Shares Outstanding (Diluted) | 4.89B5.06B | −3.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in Q2 2016?
Revenue growth was primarily driven by the Cable Communications segment, which saw a 6.0% increase due to strong performance in high-speed Internet and business services. The NBCUniversal segments also contributed, notably through the acquisition of Universal Studios Japan and growth in Cable Networks and Broadcast Television.
How did the proposed acquisition of DreamWorks Animation impact the company's financial position?
While the acquisition of DreamWorks Animation for $3.8 billion was announced, it had not yet closed as of the filing date. The company intends to use proceeds from recent debt issuances to fund the transaction. The acquisition is expected to close in 2016, subject to regulatory approvals.
What is the company's outlook on capital allocation and shareholder returns?
Comcast remains committed to returning capital to shareholders. In the first half of 2016, they repurchased $2.4 billion of common stock and paid $1.28 billion in dividends. The company also increased its quarterly dividend by 10% to $1.10 per share on an annualized basis.
What are the key risks facing Comcast as outlined in the filing?
Key risks include intense competition across all business segments, evolving consumer behavior regarding content consumption, changes in advertising markets, the need to keep pace with technological developments, regulatory scrutiny, increasing programming expenses, and the dependence on consumer acceptance of NBCUniversal's content.
06—Continue