Shares of Comcast, the nation’s largest cable MSO, fell Thursday (10/27) after Time Warner Cable, the #2 MSO, missed expectations with its Q3 financial results. Comcast will report its Q3 results next Wednesday (11/2) before the market opens.
“TWC really disappointed today, especially in light of management comments at September conferences,” said Wells Fargo Securities analyst Marci Ryvicker after seeing the TWC results on Thursday. “While results are likely to weigh on the sector’s stock price performance today, we would not extrapolate these results to CMCSA [Comcast].”
She remains bullish on Comcast. “Comcast is likely to once again show significant outperformance versus its peers.” But, Ryvicker added, “Expectations for CMCSA, which we thought had been getting ahead of themselves, are likely to be brought down.”
As of Thursday the Thomson/First Call analysts’ consensus was for Comcast’s Q3 revenues to be up 50% (including the addition of NBCUniversal) to $14.24 billion. Earnings per share were expected to rise 28% to 40 cents.
Indeed, Comcast shares fell 0.9% on Thursday (10/27) – a day when most stocks were up.
RBR-TVBR observation: DirecTV has been promoting heavily, offering its “NFL Sunday Ticket” free for a year to new subscribers. The video marketplace is very competitive, so both TWC and Comcast have been focused on building other revenue streams, including broadband Internet. Comcast, though, has gone a lot further than TWC, investing in NBCU to become a major content owner as well as distributor.