10-QPeriod: Q2 FY2019

COMCAST CORP Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 25, 2019For Securities:CMCSACCZ

Summary

Comcast Corporation's second-quarter 2019 earnings report shows a robust increase in consolidated revenue, driven by strong performance in its Cable Communications and Sky segments. While net income attributable to Comcast Corporation saw a slight decrease year-over-year for the quarter, it remained strong at $3.125 billion. The company's strategic acquisition of Sky continues to be a significant factor in its financial results, contributing to substantial revenue growth and increased operating costs and expenses. The Cable Communications segment demonstrated solid revenue growth, particularly in high-speed internet and business services, though video revenue showed a slight decline, aligning with industry trends. NBCUniversal's performance was mixed, with growth in Theme Parks and Cable Networks offset by declines in Broadcast Television and Filmed Entertainment. Sky's integration is ongoing, and while its direct-to-consumer revenue saw a slight dip year-over-year, adjusted EBITDA showed growth when excluding foreign currency impacts, indicating progress in its operational performance. The company's financial position remains strong, with significant cash flows from operations supporting debt repayment, capital expenditures, and shareholder returns.

Financial Highlights

51 data points
Beta

Revenue

$26.86B

Net Income

$3.13B

11.6% Net Margin

EPS (Diluted)

$0.68

Total Assets

$256.56B

Cash & Equivalents

$3.92B

Free Cash Flow

$4.78B

Financial Statements
Beta
Revenue$26.86B
Operating Expenses$21.50B
Operating Income$5.36B
Interest Expense$1.14B
Net Income$3.13B
EPS (Basic)$0.69
EPS (Diluted)$0.68
Shares Outstanding (Basic)4.55B
Shares Outstanding (Diluted)4.61B

Key Highlights

  • 1Consolidated revenue increased by 23.6% year-over-year for the three months ended June 30, 2019, reaching $26.86 billion.
  • 2Net income attributable to Comcast Corporation was $3.125 billion for the quarter, a slight decrease from $3.216 billion in the prior year period.
  • 3Cable Communications segment revenue grew by 3.9% to $14.45 billion, driven by strong performance in high-speed internet and business services.
  • 4NBCUniversal's total revenue decreased by 0.8% to $8.21 billion, with Theme Parks revenue increasing by 7.5% but Filmed Entertainment revenue declining by 14.8%.
  • 5Sky segment revenue was $4.83 billion, a decrease of 3.3% (or an increase of 2.4% on a constant currency basis), with Direct-to-consumer revenue down 4.0% but content revenue up 21.0%.
  • 6Adjusted EBITDA for the consolidated company increased by 17.5% to $8.716 billion.
  • 7The company reported paying $1.823 billion in dividends during the six months ended June 30, 2019, and has paused its share repurchase program in 2019 to accelerate debt reduction.

Frequently Asked Questions

The acquisition of Sky, completed in late 2018, significantly contributed to the substantial increase in consolidated revenue, with the Sky segment reporting $4.83 billion in revenue for the quarter. However, it also led to higher operating costs and expenses. While Sky's direct-to-consumer revenue saw a slight year-over-year decrease, its adjusted EBITDA showed growth when excluding foreign currency impacts, indicating positive operational trends post-acquisition.

The Cable Communications segment continues to be a strong performer, with revenue increasing by 3.9% to $14.45 billion. High-speed internet and business services showed robust growth, increasing by 9.4% and 9.8%, respectively. Video revenue remained relatively flat, impacted by declining customer numbers but offset by rate increases. Voice revenue saw a slight decrease, as expected.

NBCUniversal's performance was mixed. The Theme Parks segment saw strong revenue growth of 7.5%, benefiting from increased attendance. Cable Networks revenue grew by 2.5%, driven by distribution and content licensing. However, Broadcast Television revenue declined by 17.3% for the six-month period (and was flat for the quarter), largely due to the absence of major sporting event revenues from the prior year, and Filmed Entertainment revenue decreased by 14.8% for the quarter, primarily due to lower theatrical releases.

Comcast reported strong cash flow from operations of $14.271 billion for the six months ended June 30, 2019. The company is prioritizing debt reduction following the Sky acquisition, having paused its share repurchase program for 2019. Interest expense increased due to higher debt levels related to the Sky financing, but overall liquidity appears strong, supported by operating cash flows and available credit facilities.