Comcast (CMCSA) Posts Solid Q3 Quarter With Sales, Profit and Cash Flow Gains (Update)

November 4, 2009 8:49 AM EST

(Update with comments from analysts)

Cable giant Comcast Corporation (Nasdaq: CMCSA) reported third-quarter earnings per share of 33 cents, 8 cents above the consensus of 25 cents. Revenues for the company rose 3% to $8.8 billion, in line with the consensus of $8.85 billion.

The company's earnings increased by 22 percent as a result of the emphasis placed on its bundled sales of video, phone and internet subscriptions. Income for Comcast increased to $944 million, from $771 million in the year-ago quarter.

The 33 cents per share earned in the third quarter is a 26.9 percent increase over the same quarter last year; however the number was impacted by the recognition of tax benefits of $251 million, or 9 cents per share which was partially offset by $113 million or $0.04 per share in one-time financing expenses. Third quarter 2008 EPS included income tax benefits of $80 million or $0.03 per share. Except for these items, third quarter 2009 EPS would have grown 21.7% over the comparable 2008 period.

Free cash flow for the Company showed a growth of 20 percent, up to $1.1 billion.

In the quarter the company repurchased 16.1 million common shares for $250 million.

Comcast is also in the middle of working a deal to gain a 51 percent stake in NBC Universal, a deal which could place a burden on Comcast’s finances while making the company a one of the most powerful-global media companies.

"The strength and resilience of our businesses combined with our continued emphasis on expenses and prudent capital management helped us achieve healthy operating and financial results in the third quarter,” Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation, said. “Our goal is to deliver the best consumer experience in the marketplace and we remain focused on driving meaningful innovation in all of our products and services."

The Comcast Board of Directors declared a quarterly dividend of $0.0675 a share on the Company's common stock.

Shares for Comcast have moved up 3 percent in the premarket hours to $14.95.

Analyst Comments:
Davenport & Company has maintained a Neutral rating on Comcast given the company’s attractive free cash flow of 6.4 percent. “We would become more positively inclined toward Comcast if the company substantially increased its dividend from 27 cents to 78 cents per year, which represents a dividend yield of 5.4 percent,” Davenport analysts said.

Deutsche Bank has maintained a Buy rating and a $23 price target for Comcast citing that the sub growth suggests that 2010 and beyond growth for cable could be healthier than consensus estimates, partly due to more effective marketing by cable and partly due to shifting from recession to recovery.

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Related Categories

Dividends
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• Deutsche Bank
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