Comcast's Q2 video subscriber numbers should benefit from Verizon strike, analyst says

Comcast's second-quarter video and broadband subscriber number estimates got a slight bump from Jefferies analysts, who credited the increase in part to Verizon's now-resolved wireline worker strike with the CWA and IBEW unions.

In a new research note, Jefferies adjusted both its video and broadband estimates by 15,000. According to the research firm's new forecast, Comcast will only drop 10,000 net video subscribers in the second quarter and will add 235,000 net broadband subscribers.

In addition to giving modest credit to the Verizon strike, Jefferies said that Comcast's X1 deployment and product segmentation efforts should help drive up quarterly performance.

For the year, Jefferies expects Comcast will add more than 88,000 video subscribers.

Jefferies is predicting 6.3 percent revenue growth for Comcast's second quarter, down slightly from 6.7 percent from the year-ago quarter, which got a nice comps boost from the Mayweather pay-per-view event. The firm also raised margin estimates for Comcast because of expected lower programming expenses since YES Network is out and Al Jazeera America has been shut down.

In boosting Comcast's forecast, Jefferies also expects the cable industry as a whole to start attracting a sunnier outlook. "We expect Street estimates for Cable to move higher in the coming weeks," Jefferies analysts wrote in the research note.

The Verizon strike has officially ended after both CWA and IBEW workers have accepted new wireline contract terms. But the operator is likely bracing to take a hit when it reports its second-quarter earnings. Analysts like Wells Fargo have slashed Verizon's quarterly wireline revenue estimates by as much as $343 million and by as much as $862 million for the whole year.

Wells Fargo also lowered its estimates for Verizon FiOS video and broadband subscriber adds for the quarter.

While a competitor like Comcast can mostly sit back and benefit from Verizon's troubles, Comcast is likely benefiting more from its aggressive push around its X1 video platform leading up the Summer Olympic Games in Rio.

Comcast recently announced new X1 features including "Remind" programming alerts and "Auto-Extend," which automatically adjusts DVR recording lengths for events that go beyond scheduled times.

Related articles:
Verizon strike officially ends as wireline contracts approved by both CWA, IBEW unions
Strike torpedoes Verizon's Q2 FiOS earnings estimates due to drop in installations
Comcast announces more X1 upgrades: 'Remind' 'Auto-Extend' features go live

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