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COMCAST CORP 8-K Report, Financial Results (Jul 29, 2021)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 29, 2021
Period End
July 29, 2021
Securities
CMCSACCZ
In the record · 2016–202610-K1110-Q328-K167

CMCSA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 167 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’17May ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Feb ’26Feb ’26

01—Abstract

Summary

Summary of the 8-K filed July 29, 2021. Cited figures are marked; the original filing is the authoritative source.

Comcast reported strong second-quarter 2021 results, with revenue up 20.4% to $28.5 billiona, GAAP net income attributable to Comcast up 25.1% to $3.7 billion, and Adjusted EBITDA up 12.6% to $8.9 billion.

Adjusted EPS rose 21.7% to $0.84b, and free cash flow was $4.8 billion. Growth was broad-based. Cable Communications delivered 14.5% Adjusted EBITDA growth and record second-quarter broadband and total customer relationship net additions.

NBCUniversal Adjusted EBITDA rose 12.5%c as Theme Parks returned to profitability, while Sky's revenue increased 28.0% (14.9% in constant currency), though its Adjusted EBITDA fell 25.3%. Much of the reported revenue growth at Sky and NBCUniversal reflects comparison against COVID-depressed 2020 periods rather than underlying organic acceleration. Capital allocation was a notable development.

Comcast resumed its share repurchase program in May 2021, earlier than previously planned, repurchasing 8.8 million shares for $500 milliond in the quarter and returning $1.7 billion to shareholders in total including $1.2 billion in dividends. $9.5 billion remained under the repurchase authorization as of June 30, 2021. Free cash flow declined 19.7% year over year in the quarter, although year-to-date free cash flow rose 8.4%.

Net income was also boosted by a $1.2 billion investment gain line, and GAAP EPS was lifted by a $498 million income tax expense adjustment tied to UK tax law changes, which was excluded from Adjusted EPS. Investors should note that Peacock continued to generate significant losses, with an Adjusted EBITDA loss of $363 million in the quarter, and that Sky's margin compressed sharply to 10.7% from 18.4% due to higher sports programming costs.

Total video customers continued to decline, with 399,000 net losses in the quarter, while broadband and wireless growth accelerated. The filing itself is a Form 8-K furnishing the earnings release under Item 2.02, and the results are presented largely on a non-GAAP basis alongside GAAP reconciliations.

02—Key points

Key Highlights

  1. Revenue rose 20.4% to $28.5 billion in Q2 2021, and year-to-date revenue rose 10.8% to $55.8 billion.
  2. Adjusted EBITDA increased 12.6% to $8.9 billion, with Cable Communications up 14.5% and NBCUniversal up 12.5%.
  3. Cable added a record 354,000 broadband net customers and 280,000 wireless lines in Q2, while video customers declined by 399,000.
  4. Free cash flow was $4.8 billion in Q2 (down 19.7% year over year), and $10.1 billion year to date (up 8.4%).
  5. Share repurchases resumed in May 2021, with $500 million repurchased in Q2 and $9.5 billion remaining under authorization; $1.2 billion was paid in dividends in the quarter.
  6. Sky revenue rose 28.0% to $5.2 billion (14.9% constant currency), but Sky Adjusted EBITDA fell 25.3% and margin compressed to 10.7% from 18.4%.
  7. Theme Parks posted its first profitable quarter since Q1 2020, with Adjusted EBITDA of $221 million driven by Universal Orlando; Peacock losses of $363 million weighed on Media.

03—Questions

Frequently Asked Questions

  1. How did Comcast's core earnings performance compare to the prior year in Q2 2021?

    Adjusted EBITDA grew 12.6% to $8.9 billion and Adjusted EPS grew 21.7% to $0.84. GAAP diluted EPS rose 23.1% to $0.80. Much of the year-over-year improvement reflects a recovery from COVID-19 disruptions in 2020, particularly at NBCUniversal Theme Parks and Cable advertising.

  2. Why did free cash flow decline in the quarter even though earnings grew?

    Q2 free cash flow fell 19.7% to $4.8 billion, largely because cash taxes rose to $1.7 billion from $52 million a year earlier, and operating cash flow declined 12.0% to $7.6 billion. Year-to-date free cash flow still increased 8.4% to $10.1 billion.

  3. What is the status of Comcast's capital return program?

    Comcast resumed its share repurchase program in May 2021, earlier than planned, after pausing it in 2019 to reduce debt from the Sky acquisition. It repurchased 8.8 million shares for $500 million in Q2 and had $9.5 billion remaining under its authorization as of June 30, 2021.

  4. Are there any one-time items that affect comparability of the reported results?

    Yes. GAAP net income includes a $498 million income tax expense related to UK tax law changes, and a $59 million after-tax loss on early debt redemption. Comcast excludes these items, along with investment gains and losses and acquisition-related amortization, when calculating Adjusted Net Income and Adjusted EPS.

  5. What are the main risks or pressure points highlighted in the results?

    Peacock continues to generate large losses ($363 million Adjusted EBITDA loss in Q2), Sky margins compressed significantly due to higher sports programming costs, and video subscribers continue to decline. Management's commentary on Cable and Theme Parks was more positive, but investors should monitor these areas for sustained profitability.

04—Continue

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