Comcast Corp. Keeps The Ball Rolling

| About: Comcast Corporation (CMCSA)

Comcast Corp. (CMCSK) is the nation's leading provider of cable, entertainment and communications products and services. With 24.1 million cable customers, 11.0 million high-speed Internet customers, and 2.1 million voice customers, Comcast is principally involved in the development, management and operation of broadband cable networks and in the delivery of programming content. Comcast's content networks and investments include E! Entertainment Television, Style Network, The Golf Channel, VERSUS (formerly OLN), G4, AZN Television, PBS KIDS Sprout, TV One and four regional Comcast SportsNets.

Comcast also has a majority ownership in Comcast-Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia.

Comcast reported losses for over a decade, got into the black one year only to fall back into the red 3 out of the next 4 years. But now it's firmly in positive earnings territory, reporting 50 cents a share last year and analysts predict 95 cents this year and $1.25 next year. All those expensive infrastructure efforts are finally paying off.

Revenues have been growing. In 2005, they were $22.2 billion. In 2006, it looks like they finished the year with $25.6 billion, and this year year, look for $30.275 billion. Like any utility company, once the large expenditures have been made (in this case laying the cable), most of the added revenue will fall to the bottom line. If the company can continue to increase its customer base, offer new products and services, and keep its current customers happy, this company could just be starting to deliver major earnings.

This company wants to provide all of your information, communication and entertainment needs and essentials. It's offering 11 million customers high-speed Internet service which is about 20% more than last year!

It's Comcast Digital Voice (phone service) grew by 1.2 million subscribers to 1.35 million in 12 months as of September 30. It's averaging more than 40,000 new customers a week in this service alone in the last quarter. Many customers are choosing to get the package deal-voice, video and data. Those subscribers are up to 49.2 million.

The company sees a bright future. It bought Adelphia systems but hasn't really focused on it yet. That will add new revenues and profits soon. It's buying back stock. In 2006, it bought 64 million shares, 15 million in the third quarter. It's accelerating the rollout of CDV because that product is enhancing all of the products Comcast offers.

The stock has reflected this good news. It's up 69% from the bottom of last year's price range ($25.10). Since the company has been beating analysts' expectations over the last year, earnings estimates keep going up. The company is in good shape to meet or beat those, if it continues with its current trends. New products, new services, good support are all needed to keep this ball rolling. But with the stock's price reflecting so much good, look out if the ball stops, even for a little while.

CMCK 1-yr chart


Disclosure: Author has no position in CMCSK