Comcast: Do Strong Earnings Sweeten the Time Warner Cable Deal?

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Source: Getty Images

Source: Getty Images

Shares of Comcast Corp. (NASDAQ:CMCSA)(NASDAQ:CMCSK) edged higher in early trading on Tuesday after the tech and media giant reported strong first-quarter results. Revenue of $17.4 billion, up 13.7 percent on the year, was higher than the mean analyst estimate of $17.04 billion, while adjusted earnings of 71 cents per share, up 31.5 percent on the year, beat the mean analyst estimate of 64 cents. Unadjusted earnings of 68 cents per share were up 33.5 percent on the year.

Significantly, video customers increased by 24,000 in the first-quarter, the second consecutive month of growth and a sign that Netflix (NASDAQ:NFLX) hasn’t quite taken over the world, yet. “Our focus on the customer experience continues to drive our success as we deliver the most innovative products in the industry and make measurable progress in customer service,” commented Comcast Chair and Chief Executive Officer Brian Roberts in the earnings release. “At NBCUniversal, we had another superb quarter with double-digit revenue and operating cash flow growth driven by the tremendously successful Sochi Olympics and the best season-to-date broadcast ratings in a decade.” The Sochi Olympics generated $1.1 billion in revenue for NBC Universal.

On the bottom line, Comcast reported operating income of $3.57 billion in the first-quarter, an increase of 16.3 percent on the year. However, thanks primarily to “increased working capital, mainly driven by the Olympics and higher film and TV production spend, capital expenditures and cash taxes on operating items,” free cash flow was down 10 percent on the year at $2.82 billion.

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