Comcast’s Woes Continue

Faced with intensified TV competition on multiple fronts, cable giant Comcast Corp. Tuesday night said it will bring in less revenue, and spend more on capital projects than expected for 2007, news that sent the company’s struggling stock to a new annual low.

Comcast said in a statement that "an increasingly challenging economic and competitive environment" will limit revenue growth to 11 percent, down 1 percent from the prior forecast. Its capital expenses will be $6 billion for the year, 5 percent more than it had planned.

While cable stocks in general have been way down over the past several months, Comcast’s hit a new annual low on the heels of the change in forecast for revenue and spending. The stock dropped $2.13, or 10.3 percent, to $18.58 in morning trading, sinking as low as $18.35. In the past year, Comcast shares had ranged from $18.83 to $30.18.

The updated forecast should come as no surprise as Comcast and other big cablecos are fighting to retain current TV and even Internet customers from the likes of AT&T, Verizon and others that are offering similar multiservice bundles. It’s part of a fast-escalating sales and marketing war in which cabelcos and satellite operators have chosen to battle in TV ads over the number of HD channels carried.

The competition also is affected by the season, with the yearend holidays a huge driver in the sales of big screen TVs, most all of which are HD or HD-ready, not to mention sales of consumer electronics devices such as DVD and DVR units, iPods and PCs.

In the Northeast corridor, Comcast’s prime territory, Verizon has trumped it by offering higher speed and symmetric Internet access and has doubled the number of years on its triple-play package deal compared with Comcast’s deal which costs $99 a month for a year.

Worse still, cablecos have spent the last few months fighting off attempts by FCC members to regulate their industry and there are efforts underway to limit the size of Comcast, perhaps distracting the company from core business goals such as customer retention and acquisition.

Comcast Corp. www.comcast.com

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