Comcast Corporation (NASDAQ:CMCSA) was a big mover rallying by more than 6% as investors reacted to a better than expected earnings report. The company topping earnings estimates at the back of a rise in internet users got the market excited. Similarly, the stock sentiments edged higher as the media giant increased its dividend payout.
Comcast Earnings Beat
The media giant reported earnings per share of 56 cents a share beating consensus estimates by 14.3%. Revenues fell 2.4% to $27.71 but still much better than $26.78 billion expected by Wall Street. Cable Communication revenues were up 6.3% to $15.71 billion as total customer relationships increased by 455K to 33.14 million. High internet speeds were also up 12.7% to $5.40 billion driven by increased residential high-speed internet customers.
The better than expected revenues and earnings came at the back of strong broadband demand offsetting pandemic related weakness in the theme park business and filmed entertainment business. The company gained 538,000 above consensus estimates of 488,000 net additions.
Revenue was down 2.4% year-over-year hurt by insignificant movie ticket sales and reduction in theme park attendance owing to COVID-19 disruptions. Even as traffic to theme park contracted, demand for Comcast broadband and streaming video remained high as people were forced to work from home. Comcast is increasingly becoming a big player in the streaming business having registered 33 million sign-ups in its Peacock streaming service.
Outlook and dividends
Management expects Comcast’s financials to improve in 2021 in the wake of vaccine rollout. The vaccines are expected to ease the COVID-19 fears, resulting in a rollback of business in movie theatres and theme parks.
In anticipation of improving business fundamentals in 2021, Comcast has increased its dividend by $0.08 to $1 a share representing a 9% year over year increase. Likewise, the company has confirmed a $0.25 a share dividend payable on April 28, 2021, to shareholders of record as of April 7, 2021.
Comcast has been on an impressive run recouping all the losses accrued in 2020. Likewise, the stock is on its way to registering a new 52-week high at the back of strong upward momentum.