Comcast earnings beat as wireless offsets broadband decline
Xfinity Mobile adds 1.5 million lines in record year while cable losses persist
Comcast shares rose in pre-market trading Thursday after the cable and media giant reported fourth-quarter earnings that handily exceeded Wall Street expectations, powered by record wireless subscriber growth that helped offset continued pressure on its core broadband business.
The Philadelphia-based company posted adjusted earnings per share of 84 cents for the quarter, surpassing analyst estimates of 75 cents by approximately 12%. Adjusted EBITDA reached $7.9 billion, with free cash flow of $4.4 billion. For the full year, adjusted EPS totaled $4.31.
The standout performance came from Comcast's wireless division, which delivered its best year on record with 1.5 million net line additions in the fourth quarter. This growth significantly exceeded analyst expectations—Bank of America Securities had projected roughly 380,000 wireless net additions heading into earnings. The momentum extends from the third quarter, when Comcast reported adding 414,000 new Xfinity Mobile customers, its best quarterly result at that time.
However, the company's legacy broadband business continued to face headwinds from intensifying competition in the telecommunications market. Analysts had expected a net loss of 200,000 broadband subscribers for the quarter, reflecting broader industry trends. Wells Fargo Securities has forecast that cable operators, including Comcast, could lose up to 1 million residential broadband subscribers in 2026 as fiber and fixed wireless access providers chip away at market share.
Comcast moved to reassure investors by maintaining its dividend on an annualized basis for 2026, with the next payment scheduled for February 4th. The stock currently offers a dividend yield of 4.43%, based on an annual payout of $1.30 per share.
Despite the earnings beat, Comcast shares have been under pressure in recent months, trading well below their 52-week high of $34.17. The stock closed Wednesday at $28.41, giving the company a market capitalization of approximately $116 billion. Shares were down about 1% in pre-market trading, suggesting investors remain cautious about the long-term challenges facing the cable business.
The valuation reflects that skepticism—Comcast trades at a trailing price-to-earnings ratio of just 4.89 times, well below historical averages and significantly cheaper than the broader market. Analysts maintain a moderate buy rating on the stock, with an average one-year price target ranging from $35.10 to $35.40, according to multiple research sources.
Sentiment has been mixed among major brokerages. Bank of America Securities upgraded Comcast to "Buy" from "Neutral" on January 12th, raising its price target to $37 from $31. Conversely, Bernstein lowered its target to $32 from $34 while maintaining a "Market Perform" rating. Barclays set an "equal weight" rating with a $28 price objective, and BNP Paribas Exane reduced its target from $28.10 to $28.00 while keeping a "neutral" stance.
The strong wireless performance underscores Comcast's strategy to pivot beyond traditional cable subscriptions. Xfinity Mobile, which operates on Verizon's network, has emerged as a growth engine as consumers increasingly cut the cord on traditional pay-television services. The wireless unit now serves as a critical offset to broadband losses, though promotional offers used to attract new customers may be pressuring near-term revenue growth.
Investors will be watching closely for management's commentary on the competitive landscape when Comcast hosts its earnings call later Thursday. The ability to sustain wireless momentum while stabilizing broadband losses will be crucial for determining whether the stock's depressed valuation presents an opportunity or reflects deeper structural challenges facing the cable industry.