Cable companies are taking a beating, and Comcast (CMCSA) has cut some of it guidance, which will make matters worse.
The firm said that reflecting an increasingly challenging economic and competitive environment and consistent with trends across the sector, Revenue Generating Units (sum of all digital cable, phone, basic cable and high-speed internet) are now expected to increase by approximately 6 million to 57 million, versus previous guidance of approximately 6.5 million additions.
In addition, cable capital expenditures are expected to be approximately $6.0 billion for the year, a 5% increase from originally issued guidance, reflecting increased advanced digital set-top box purchase, Comcast’s digital acceleration program, expanded network enhancements and acquisition-related investments.
Due to the changes, the firm’s consolidated free cash flow is expected to be approximately 80% of 2006, compared to previous estimates of 2007 consolidated free cash flow of at least 90% of 2006.
The news took Comcast shares down almost 5% after hours to $19.75 and is likely to hit Time Warner Cable (TWC), Cablevision (CVC), and Charter (CHTR) tomorrow.
Douglas A. McIntyre
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