Comcast (CMCSA) to Report Q3 Earnings: What's in the Cards?

Aniruddha Ganguly
·4-min read

Comcast CMCSA is set to report third-quarter 2020 results on Oct 29.

The Zacks Consensus Estimate for third-quarter 2020 revenues is pegged at $24.75 billion, indicating a 7.8% dip from the year-ago quarter’s reported figure.

Moreover, the consensus mark for earnings has moved north by 4.1% to 51 cents over the past 30 days, suggesting a decline of 35.4% from the figure reported in the year-ago quarter.

Notably, Comcast beat on earnings in all the trailing four quarters, the average being 9.8%.

 

Comcast Corporation Price and EPS Surprise

Comcast Corporation Price and EPS Surprise
Comcast Corporation Price and EPS Surprise

Comcast Corporation price-eps-surprise | Comcast Corporation Quote

 

Let’s see how things are shaping up prior to this announcement.

Internet & Mobile Subscriber Base Growth a Tailwind

Comcast’s top line in the to-be-reported quarter is expected to have benefited from an increased number of high-speed Internet subscribers amid the coronavirus outbreak. Increased media consumption and work-from-home wave are expected to have augured well for this cable giant.

Additionally, improving customer experience owing to expanding Wi-Fi coverage and innovative xFi control features are expected to have aided subscriber growth.

The Zacks Consensus Estimate for Cable Communication – High Speed Internet revenues is pegged at $5.15 billion, indicating 9.2% growth from the figure reported in the year-ago quarter.

Notably, Comcast’s wireless business added 126K lines in the second-quarter 2020. The momentum is expected to have continued in third quarter.

Additionally, expanding device offerings like Samsung Galaxy Note 20 5G and the latest Apple Watch and iPad are noteworthy.

The Zacks Consensus Estimate for Cable Communication revenues is pegged at $14.74 billion, implying 1% growth from the figure reported in the year-ago quarter.

NBCUniversal & Theme Park Revenues to Take a Hit

Comcast’s NBCUniversal and Theme Park revenues are expected to have been negatively impacted by the coronavirus pandemic.

The Zacks Consensus Estimate for NBCUniversal revenues stands at $6.51 billion, implying a 21.6% decline from the figure reported in the year-ago quarter. This division is expected to have been hurt by lack of film releases and lost sports advertising revenues due to coronavirus-induced lockdowns and social-distancing measures, globally.

Further, the consensus mark of $351 million for Theme Parks’ revenues is significantly lower from $1.63 billion reported in the year-ago quarter.

However, NBCUniversal’s streaming service Peacock is expected to have gained users thanks to its solid content in the to-be-reported quarter. The availability of Peacock on Roku’s platform is a noteworthy development in the to-be-reported quarter.

Sky’s Robust Content to Aid Growth

Meanwhile, Sky’s top-line growth is expected to have benefited from the resumption of sports-content coverage in the to-be-reported quarter. The launch of Sky Sports NFL on Sep 3 is expected to have strengthened user base.

However, the Zacks Consensus Estimate for Sky revenues is pegged at $4.20 billion, implying a 7.7% decline from the figure reported in the year-ago quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Comcast has an Earnings ESP of +1.86% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other companies worth considering as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:

Alphabet GOOGL has an Earnings ESP of +7.4% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics ARW has an Earnings ESP of +3.93% and is #2 Ranked.

Apple AAPL has an Earnings ESP of +2.97% and is Zacks #3 Ranked.

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