Comcast Corp. (NASDAQ:CMCSA)

The period under review demonstrates significant fluctuations in economic profit. Initially, the company experienced economic losses, followed by a recovery culminating in positive economic profit by the end of the observed timeframe. These shifts are driven by changes in net operating profit after taxes, cost of capital, and invested capital.

Net Operating Profit After Taxes (NOPAT)

NOPAT decreased substantially from 2021 to 2022, falling from US$19,205 million to US$6,839 million. A recovery began in 2023, with NOPAT reaching US$16,517 million, and continued through 2025, reaching US$26,540 million. This indicates improving operational performance in the later years of the period.

Cost of Capital

The cost of capital exhibited a slight decrease over the period, moving from 10.98% in 2021 to 9.45% in 2025. While the decrease is not dramatic, it contributes to the improvement in economic profit, particularly in the later years, as it reduces the required return on invested capital.

Invested Capital

Invested capital decreased from US$229,271 million in 2021 to US$211,438 million in 2023. It then experienced a modest increase, reaching US$233,085 million in 2025. The fluctuations in invested capital, combined with changes in NOPAT and cost of capital, significantly influence the economic profit calculation.

Economic Profit

Economic profit was negative for the first three years of the period, with the largest loss occurring in 2022 at -US$16,212 million. The losses diminished in 2023 (-US$6,620 million) and 2024 (-US$2,708 million) before turning positive in 2025, reaching US$4,519 million. This positive economic profit in 2025 suggests the company generated returns exceeding its cost of capital.

The trend suggests a period of initial underperformance followed by a substantial improvement in value creation. The increasing NOPAT, coupled with a decreasing cost of capital, played a crucial role in shifting the company from economic losses to economic profit.

Net income attributable to Comcast Corporation and Net Operating Profit After Taxes (NOPAT) exhibited distinct performance patterns between 2021 and 2025. NOPAT demonstrated a more volatile trajectory compared to net income, with a significant decline in 2022 followed by a substantial recovery and continued growth through 2025. Net income, while also experiencing a decrease in 2022, maintained a more consistent upward trend from 2023 onwards.

NOPAT Trend Analysis

In 2021, NOPAT stood at US$19,205 million. A considerable decrease was observed in 2022, falling to US$6,839 million. This represents a substantial year-over-year decline. Subsequently, NOPAT experienced a strong recovery in 2023, reaching US$16,517 million. This positive momentum continued into 2024, with NOPAT increasing to US$18,803 million, and accelerated further in 2025, reaching US$26,540 million. The 2025 value represents the highest NOPAT recorded within the observed period.

Net Income Trend Analysis

Net income attributable to Comcast Corporation began at US$14,159 million in 2021. A significant reduction occurred in 2022, with net income decreasing to US$5,370 million. However, unlike NOPAT, the decline was not as drastic proportionally. From 2023 onwards, net income demonstrated consistent growth, increasing to US$15,388 million, then to US$16,192 million in 2024, and culminating in US$19,998 million in 2025. This indicates a sustained improvement in profitability over the latter part of the period.

The divergence between the trends in NOPAT and net income suggests potential shifts in the company’s capital structure or non-operating expenses. The substantial recovery in NOPAT from 2022 to 2025 indicates successful operational improvements or favorable changes in the operating environment. The consistent growth in net income from 2023 onwards reinforces a positive overall financial performance.

The relationship between income tax expense and cash operating taxes demonstrates notable fluctuations over the five-year period. While both metrics represent tax-related financial obligations, their divergence suggests timing differences between reported accounting expense and actual cash outflows.

Income Tax Expense

Income tax expense initially decreased from US$5,259 million in 2021 to US$4,359 million in 2022, representing a decline of approximately 17%. It then increased to US$5,371 million in 2023, exceeding the 2021 level. A significant decrease was observed in 2024, falling to US$2,796 million, before rising substantially to US$6,106 million in 2025. This pattern indicates considerable volatility in the company’s reported tax liability.

Cash Operating Taxes

Cash operating taxes exhibited a different trend. An increase from US$4,326 million in 2021 to US$6,068 million in 2022 suggests a greater cash outflow for taxes despite the decrease in income tax expense during that period. This figure continued to rise sharply in 2023, reaching US$9,025 million. A substantial decline occurred in 2024, with cash operating taxes falling to US$4,622 million, followed by a slight decrease to US$4,412 million in 2025. The 2023 peak represents the highest value within the observed timeframe.

The divergence between income tax expense and cash operating taxes is particularly pronounced in 2022 and 2023. In 2022, income tax expense decreased while cash operating taxes increased, potentially indicating deferred tax liabilities being realized or changes in tax payment schedules. The substantial increase in cash operating taxes in 2023, coupled with a moderate increase in income tax expense, warrants further investigation into the underlying causes, such as changes in tax laws, audit adjustments, or accelerated tax payments. The decrease in both metrics in 2024 and the subsequent increase in income tax expense in 2025 suggest a reversal of some of these earlier effects.

The fluctuations in cash operating taxes are more significant than those in income tax expense, implying that the timing of cash tax payments is not directly correlated with the accounting recognition of tax expense. This difference is crucial when evaluating the company’s free cash flow and overall financial performance.

The reported invested capital exhibited fluctuations over the five-year period. Total reported debt & leases and total shareholders’ equity both contribute to the calculation of invested capital, and their individual trends influence the overall invested capital figure.

Invested Capital Trend

Invested capital decreased from US$229,271 million in 2021 to US$213,299 million in 2022, representing a decline of approximately 7.4%. A further decrease was observed in 2023, falling to US$211,438 million. However, invested capital then increased to US$215,138 million in 2024, and continued to rise significantly in 2025, reaching US$233,085 million. This represents an overall increase of approximately 1.6% between 2021 and 2025.

Debt & Leases Trend

Total reported debt & leases remained relatively stable between 2021 and 2025. It decreased slightly from US$102,089 million in 2021 to US$101,593 million in 2022. A modest increase occurred in 2023, reaching US$103,676 million, followed by a further increase to US$105,413 million in 2024. The figure decreased slightly in 2025 to US$105,033 million. The overall change from 2021 to 2025 was minimal.

Shareholders’ Equity Trend

Total shareholders’ equity experienced a notable decrease from US$96,092 million in 2021 to US$80,943 million in 2022, a decline of approximately 15.7%. Shareholders’ equity then showed a modest recovery, increasing to US$82,703 million in 2023 and US$85,560 million in 2024. A significant increase was observed in 2025, with shareholders’ equity reaching US$96,903 million, returning to levels comparable to those observed in 2021.

The increase in invested capital in 2025 appears to be driven primarily by the substantial rise in shareholders’ equity, while debt & leases remained relatively constant. The earlier decline in invested capital between 2021 and 2023 was largely attributable to the decrease in shareholders’ equity during that period.

The economic spread ratio exhibited a notable progression over the five-year period. Initially negative, the ratio demonstrated improvement, culminating in a positive value by the final year. This shift suggests a strengthening of the company’s ability to generate returns exceeding its cost of capital.

Economic Spread Ratio

In 2021, the economic spread ratio stood at -2.60%, indicating that returns generated from invested capital were below the company’s cost of capital. This deficit widened considerably in 2022, reaching -7.60%, representing the most substantial underperformance during the observed timeframe. A gradual recovery commenced in 2023, with the ratio improving to -3.13%. This positive trend continued into 2024, with the ratio reaching -1.26%, signifying a narrowing gap between returns and the cost of capital. By 2025, the economic spread ratio turned positive, reaching 1.94%, demonstrating that the company was generating returns exceeding its cost of capital.

The movement in the economic spread ratio correlates with the trend in economic profit. The negative economic profits in 2021, 2022, 2023, and 2024 align with the negative economic spread ratios during those years. The transition to positive economic profit in 2025 is mirrored by the positive economic spread ratio, reinforcing the relationship between these two metrics.

Invested Capital

Invested capital experienced a decrease from US$229,271 million in 2021 to US$213,299 million in 2022, followed by a further reduction to US$211,438 million in 2023. A slight increase was observed in 2024, reaching US$215,138 million, and continued into 2025, with invested capital rising to US$233,085 million. The increase in invested capital in the later years, coupled with the improvement in the economic spread ratio, suggests that the company’s investments were becoming more profitable.

The observed pattern suggests a period of initial underperformance followed by a successful turnaround. The increasing economic spread ratio and the shift to positive economic profit in the final year indicate improved capital allocation and enhanced profitability.

The economic profit margin exhibited significant fluctuation over the five-year period. Initially negative, the margin demonstrated improvement culminating in a positive value by the final year presented.

Economic Profit Margin Trend

The economic profit margin began at -5.12% in 2021. This decreased substantially to -13.42% in 2022, representing the lowest point in the observed period. A partial recovery was noted in 2023, with the margin increasing to -5.41%. Further improvement occurred in 2024, reaching -2.18%. Finally, in 2025, the economic profit margin turned positive, reaching 3.64%.

The movement in the economic profit margin closely mirrors the trend in economic profit. The substantial decline in economic profit from 2021 to 2022 directly resulted in the larger negative margin for that year. The subsequent increases in economic profit in 2023 and 2024 were accompanied by improvements in the margin, though it remained negative. The positive economic profit recorded in 2025 drove the margin into positive territory.

Relationship to Adjusted Revenue

Adjusted revenue demonstrated consistent growth throughout the period, increasing from US$116,407 million in 2021 to US$124,253 million in 2025. However, revenue growth alone did not guarantee margin improvement. The significant drop in economic profit in 2022, despite revenue increases, highlights the importance of cost of capital and operational efficiency in determining overall economic profitability.

The shift from negative to positive economic profit margin in 2025 suggests that the company’s returns exceeded its cost of capital in that year. This represents a positive development, indicating improved value creation. The preceding years, however, demonstrate a period where returns were insufficient to cover the cost of capital.