Comcast Posts Surprise 4Q Profit; Shares Gain 6.6%


Comcast’s fourth-quarter earnings and revenue came in ahead of analysts’ estimates, sending its shares up 6.6% on Jan. 28.

The media company reported revenue of $27.7 billion in the fourth quarter, which declined 2.4% year-on-year but beat the Street consensus of $26.8 billion. Comcast (CMCSA) posted earnings of $0.56 per share in 4Q beating analysts’ estimates of $0.48.

The company said that its cable communications and high-speed Internet businesses had the best fourth quarter with additions of 455,000 and 538,000 customers, respectively.

Brian L. Roberts, Comcast CEO said, “Outstanding performance at Cable drove very strong fourth quarter results for our company. We delivered adjusted EBITDA growth of over 12%. Our theme parks in Orlando and Osaka reached breakeven; and encouragingly, Sky returned to customer growth in all three of its markets, bringing our total customer relationships and overall revenue in Europe essentially back to 2019 levels.”

Additionally, the company increased its dividend by $0.08 per share, or 9%, to $1 per share, on an annualized basis. It declared a quarterly cash dividend of $0.25 per share that would be payable on April 28 to shareholders of record as on April 7. (See Comcast stock analysis on TipRanks)

Comcast also expects to reinstate its share repurchase program in the second half of this year.

Following the earnings results, Rosenblatt Securities analyst Bernie McTernan raised the stock’s price target from $56 to $60 and reiterated a Buy rating.

“The key takeaway from earnings is the company will be resuming buybacks earlier than expected, showing confidence in their ability to de-lever post-pandemic,” McTernan wrote in a research note to investors. “Peacock sign ups surged and the streaming service will continue to grow in significance to the company as cord cutting reaccelerates – we are increasing our video sub losses in ’21E to -1.8M from -1.5M prior and -1.4M in ’20E.”

The rest of the Street is in line with McTernan’s bullish outlook. The Strong Buy consensus rating is based on 11 analysts recommending a Buy and 3 analysts suggesting a Hold. The average analyst price target of $57.73 implies 11.9% upside potential to current levels.

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