01—Abstract
Summary
Summary of the 10-Q filed October 25, 2018. Cited figures are marked; the original filing is the authoritative source.
Comcast Corporation's (CMCSA) third-quarter 2018 report shows solid revenue growth, driven by its Cable Communications and NBCUniversal segments.
Total revenue increased by 5.0% year-over-year for the three months ended September 30, 2018, reaching $22.1 billiona, and by 5.9% for the nine-month period to $66.7 billion. Net income attributable to Comcast Corporation also saw a significant rise, up 9.3% for the quarter to $2.9 billion and 19.2% for the nine months to $9.2 billion. A major development during the period was Comcast's acquisition of a controlling interest in Sky plc in early October 2018, a transaction valued at approximately $39.4 billion.
This strategic move, detailed in the 'Significant Transactions' note, is expected to significantly expand Comcast's international presence. While the Sky acquisition significantly impacted financing activities and debt levels, the company is also planning to pause its share repurchase program in 2019 to accelerate debt reduction related to this acquisition.
02—Key points
Key Highlights
- Total revenue increased by 5.0% to $22.1 billion for the third quarter and by 5.9% to $66.7 billion for the first nine months of 2018.
- Net income attributable to Comcast Corporation grew by 9.3% to $2.9 billion for the quarter and 19.2% to $9.2 billion for the nine months.
- The company completed the acquisition of a controlling interest in Sky plc for approximately $39.4 billion, a significant strategic expansion into European markets.
- Cable Communications segment revenue grew by 3.4% to $13.8 billion for the quarter, driven by increases in High-Speed Internet, Business Services, and Advertising revenue.
- NBCUniversal segment revenue increased by 8.1% to $8.6 billion for the quarter, with strong performance in Cable Networks and Broadcast Television.
- The company repurchased $4.0 billion of common stock in the first nine months of 2018 but plans to pause its share repurchase program in 2019 to focus on debt reduction from the Sky acquisition.
- Adjusted EBITDA, a key non-GAAP metric, increased by 2.5% to $7.3 billion for the quarter and 4.0% to $22.0 billion for the nine months.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2018filed October 25, 2018Financial Statements
Q3 FY2018 against Q3 FY2017
| Line item | Q3 FY2018Q3 FY2017 | Change |
|---|---|---|
| Revenue | $22.14B$21.08B | +5.0% |
| Operating Expenses | $17.30B$16.30B | +6.1% |
| Operating Income | $4.84B$4.78B | +1.2% |
| Interest Expense | $830.00M$766.00M | +8.4% |
| Net Income | $2.89B$2.64B | +9.2% |
| EPS (Basic) | $0.63$0.56 | +12.5% |
| EPS (Diluted) | $0.62$0.55 | +12.7% |
| Shares Outstanding (Basic) | 4.56B4.70B | −2.9% |
| Shares Outstanding (Diluted) | 4.62B4.78B | −3.3% |
05—Questions
Frequently Asked Questions
What was the impact of the Sky acquisition on Comcast's financials?
The acquisition of a controlling interest in Sky plc, valued at approximately $39.4 billion, was completed shortly after the quarter end (October 9, 2018). While the full financial impact will be reflected in future periods, financing activities in the third quarter included substantial borrowings to fund the acquisition. Comcast plans to pause its share repurchase program in 2019 to accelerate the reduction of debt incurred for this acquisition. Sky's results will be consolidated starting in the fourth quarter of 2018.
How did the Cable Communications segment perform?
The Cable Communications segment demonstrated robust growth, with revenue increasing by 3.4% to $13.8 billion for the third quarter. Key drivers included a 9.6% increase in High-Speed Internet revenue and an 11.2% increase in Business Services revenue, indicating continued demand for broadband and business solutions. Video revenue saw a slight decline, as expected due to competitive pressures, but was offset by growth in other areas.
What is the outlook for video and high-speed internet services?
Comcast expects continued declines in residential video customers and revenue due to intense competition from traditional and new distribution platforms. Conversely, High-Speed Internet revenue saw significant growth (9.6% for the quarter), driven by increasing customer numbers and rate adjustments, reflecting strong consumer demand for broadband services.
How did NBCUniversal perform in this quarter?
The NBCUniversal segments collectively showed strong performance, with revenue up 8.1% to $8.6 billion for the third quarter. Cable Networks revenue increased by 10.8%, driven by distribution and content licensing. Broadcast Television revenue grew by 15.4%, benefiting from advertising, content licensing, and distribution. The Filmed Entertainment segment's Adjusted EBITDA declined due to the performance of film releases, while Theme Parks saw a slight revenue decrease.
06—Continue