The Dividend Daily

Cable TV and Internet provider Comcast Corporation (CMCSA) said Wednesday that its third quarter profit jumped 22% from last year, helped by higher promotions on its bundled services.

The Philadelphia-based company reported third quarter net income of $944 million, or 33 cents per share, compared with $771 million, or 26 cents per share, in the year-ago period. Revenue rose 3% from last year to $8.8 billion.

On average, Wall Street analysts expected a smaller profit of 25 cents per share, albeit on slightly higher revenue of $8.85 billion.

Free cash flow rose 20% from last year, to $1.1 billion. Free cash flow is a key indicator of cable TV industry liquidity, since cable TV operators typically carry a lot of debt.

Comcast is currently in negotiations to buy NBC Universal from General Electric (GE), but no details of that potential deal were mentioned in the company’s earnings report. Comcast shares rose 34 cents, or +2.3%, in premarket trading Wednesday.

The Bottom Line
We have avoided shares of CMCSA since our early June coverage began last year, when the stock was trading at $21.94. The company has a dividend yield of 1.86%, based on last night’s closing stock price of $14.51. The stock has technical support in the $13 price area. If the shares can firm up, we see overhead resistance around the $16.50-$18.00 price level. We would remain on the sidelines for now

Comcast Corporation (CMCSA) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

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