I just came across this take on Comcast (CMCSK/NASDAQ) by the Financial Times' venerable Lex Column, only this is a free link (you don't have to be an FT subscriber to read it):
Better late than never. Comcast has finally lumbered onto the trail blazed by rival Cablevision. Strong growth in high-speed internet and telephony customers drove revenues 10 per cent higher in the first quarter. The strength of those products is also helping to reduce basic cable TV cancellations and even to stimulate some growth.
UBS estimates cable will take 25 per cent of new pay-TV subscribers in the first quarter. In recent years, satellite operators have taken more than100 per cent – with cable going backwards. Comcast has also demonstrated that it can ratchet up growth without too much extra capital expenditure, resulting in stronger cash flows.
Then the Lex editors offer up some caution, which I agree with. And being long the stock, I obviously agree with their conclusion.
It is only one quarter. And the threat from the big telecoms operators – who are laying new fibre to offer their own "triple-play" bundle – is still looming. That will eat into cable's market share and could affect pricing within the next couple of years, just as cable's natural momentum slows. But, in the meantime, cable should thrive. Only a tiny proportion of the homes passed by Comcast take its telephony service and 22 per cent take high speed internet. The more customers sign up to multiple products the tougher it will be for telecoms operators to steal them. Investor greed for a slice of the growth is starting to outweigh their fear of pricing Armaggedon further down the line. In spite of rising 17 per cent from their March lows, Comcast's shares have further to run.