Comcast to Take $1B-Plus Charge in Sweeping Restructuring as Broadband Bleeds
CMCSA is trading near its 52-week low of $20.48 (10% above the low) on light trading volume (0.2× avg).
Summary
Comcast will book a $1 billion-plus charge in the fourth quarter as it launches a restructuring it calls the most significant transformation in its history. Co-CEO Mike Cavanagh said the plan redesigns decision-making and resource allocation to make the company more agile and efficient, with the aim of improving long-term profitability and free cash flow. The move comes as the core connectivity business deteriorates: connectivity-and-platforms revenue fell 2.6% in constant currency to $19.66 billion, worse than Wall Street expected, and Comcast lost about 144,000 domestic residential broadband customers versus 91,000 a year earlier and 131,000 expected. Domestic video losses also ran hot at 274,000, and wireless net adds of 368,000 missed estimates. Content was the offset — revenue there grew 6.5% to $10.54 billion, Peacock revenue rose 34% to $1.82 billion on 48 million paid subscribers, and total profit rose to $3.45 billion from $3.33 billion. The charge and the broadband trajectory are the two numbers that matter; the restructuring follows the October 21 report of significant job cuts and the September warnings that Q3 broadband losses would worsen year-over-year.
At the time of this announcement, CMCSA was trading at $22.57 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $80.1B. The 52-week trading range was $20.48 to $32.86. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.