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Comcast Q1: NBCU Film Weak, TV Ads Gain; Theme Parks Strong

Comcast ( CMCSA ) is expected to report flat Q1 EPS with revenue rising 4%, though analysts expect a strong quarter in video subscriber additions. At NBCUniversal, analysts say ad revenue could be a bright spot at TV broadcasting, though film revenue will fall from the year-earlier quarter amid a weaker slate of movies. Theme parks might get a boost from late March school breaks tied to Easter. Comcast stock has risen 7.5% in 2016, despite regulatory headwinds. The nation’s No. 1 cable TV firm is slated to release Q1 earnings before the open Wednesday. Comcast holds an IBD Composite Rating of 74 out of a possible 99. Cable TV firms have been squabbling with the Federal Communications Commission over broadband privacy issues as well as the agency’s plans to open up the set-top box market  to more competition. Some analysts say there could be more scrutiny of broadband pricing and data caps depending on the outcome of the 2016 election. In Q1, rival Verizon Communications ( VZ ) said it would expand its FiOS broadband and TV services to Boston, a Comcast market, though its timing is unclear. Analysts polled by Thomson Reuters expect Comcast to report profit of 79 cents, even with the year-earlier period, which would be its worst showing in at least 19 quarters. Analysts estimate revenue will rise 4% to $18.64 billion, its smallest percentage rise in four quarters. Comcast stock was down a fraction in afternoon trading in the stock market today , near 60.50. On Comcast’s earnings call, executives might discuss NBCU’s upcoming contract renewals with Dish Network ( DISH ) and Verizon Communications ( VZ ), and a programming dispute with 21 st Century Fox ’s ( FOXA ) ( IBD ) YES sports network. Charter Communications ( CHTR )  will be the No. 2 cable TV firm if federal regulators approve its acquisitions of  Time Warner Cable ( TWC ) and Bright House Networks. Both Charter and TWC report earnings on Thursday.

Cablevision-Altice, Charter-TWC Mergers Seen Advancing

Cablevision Systems ( CVC ) stock jumped Friday on a report that New York City will not block its acquisition by Europe’s Altice Group. In New York, Altice would compete against  Verizon Communications ( VZ ) and its FiOS services. Verizon said earlier this week it plans to expand FiOS services to Boston. Cablevision stock was up more than 2%, near 33.70, in morning trading in the stock market today , breaking out of a flat base at 33.45 buy point. Altice had been under scrutiny because of its debt. New York City, however, determined that former Mayor Michael Bloomberg gave away its authority in cable mergers to the state, the New York Post said in a report. Meanwhile, Charter Communications ( CHTR ) is awaiting the Federal Communications Commission’s approval for its acquisition of Time Warner Cable ( TWC ). An administrative law judge in California on Tuesday recommended that the Charter-TWC deal be approved with conditions, clearing a hurdle. The FCC thwarted Comcast ’s ( CMCSA ) proposed purchase of TWC in early 2015. If both the Charter-TWC and Altice-Cablevision deals go through, cable TV firms are likely to explore asset swaps of cable systems in different markets, a Barclays analyst has speculated. Comcast could be involved, says Barclays. Charter also plans to buy privately held Bright House Networks. Altice in May acquired a 70% stake in Midwest-based Suddenlink Communications. Altice agreed to pay about $10 billion, or $34.90 per share, for Cablevision, including $3 billion in cash.

Comcast Could Gain From Moderating Programming Costs, Says Nomura

Comcast ’s ( CMCSA ) programming costs should moderate after 2017, boosting the cable TV side of its business, while its NBCUniversal division gets a lift from its own contract renewals, says a bullish Nomura report. Nomura analyst Anthony DiClemente expects Comcast to report a strong first quarter. Comcast is slated to post Q1 earnings on April 27. Some analysts have been raising estimates  for Comcast’s Q1 video subscriber additions. “Comcast is likely to meet or beat Q1 expectations,” said DiClemente in the report. “We expect 2016 to be a strong year of execution for Comcast, driven by video and broadband subscriber upside, as well as NBCU tailwinds from retransmission and affiliate fee growth, constructive parks trends and the Rio Olympics.” Comcast stock has gained more than 10% in 2016, and was down a fraction, near 62, in early trading in the stock market today . “After 2017, we believe Comcast likely has the majority of its major programming rights locked in until around 2020, suggesting substantial earnings potential and operating leverage in the out years,” said DiClemente. “Comcast (also) stands to benefit from the other side of the rights negotiation table through its ownership of NBCUniversal.” He says NBCU has upcoming renewals with Dish Network ( DISH ) and Verizon Communications ( VZ ). Comcast is the nation’s No. 1 cable TV provider. Charter Communications ( CHTR ) will be No. 2 if federal regulators approve its acquisitions of Time Warner Cable ( TWC ) and Bright House Networks. The Federal Communications Commission is expected to approve the Charter-Time Warner Cable deal with conditions, but California regulators may not green-light the merger until May.