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Comcast (NASDAQ: CMCSA), the high-profile cable and Internet provider, produced some good second-quarter stats on Thursday. Reuters says that the 33 cents per share earned in the period beat estimates by 7 cents. According to the company press release, sales increased over 4% and operating cash flow expanded by over 5%. Free cash flow, however, was flat in Q2.
That wasn't a big deal, though. The free cash covered both the dividend and the monies used to repurchase shares. In fact, Reuters reported that the buyback activity in the quarter represented a resumption of the program. We can take that as a positive sign of confidence from management.
Comcast did all right when it came to growing subscribers in most of its business lines. Voice customers saw a double-digit increase. Unfortunately, video customers dropped a bit. Obviously the company has to work on that aspect of its portfolio.
After processing the entire snapshot of the quarter, I think it's reasonable to say that Comcast is managing its business fairly well during the recession. Focusing on free cash flow is admirable. And I'll say this about the company: it has some great advertising spots (you've got to love the Slowskys). Of course, Verizon (NYSE: VZ) is really hitting the market with its FiOS product, but again, I think Comcast's marketing department knows how to hit back in creative fashion.
Comcast likes to highlight its on-demand menu offerings. It's a strong element of the company's overall business model. I believe there are further opportunities to be realized here. Comcast should work on providing even more unique, compelling content to keep subscribers occupied and to acquire new customers. As time goes on, viewers will be looking to this section of their cable universe as a prime source of entertainment.
As far as my opinion on the stock goes, I don't believe it is a strong buy. It's seen a rise in the last month. If the stock sells off a dollar or two, then I'd be interested in taking another look.
Disclosure: I don't own any company mentioned; positions can change without notice.
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