Comcast’s Profits: Sad But True
Posted on: Apr 30th, 2009 | By Andrew Snyder | Filed under Stock Market Investing
The cable industry will lose a subscriber tomorrow, but there are thousands of folks willing to take my place. Is Comcast’s success truly tied to the nation’s unemployment figure?
Call me a tightwad. Call me un-hip. Just don’t call me a cable subscriber. I am fed up with the programming being forced into my house through that innocent-looking wire.
It is ironic my colleagues and I were discussing our issues with Comcast (NASDA:CMCSA) and its various products this morning. While not all views were negative, I revealed the seemingly anti-American news that I would no longer be a cable subscriber after tomorrow.
I am using the switch to digital TV as an opportunity to scribble out yet another monthly bill and strap up a pair of rabbit ears.
According to the company’s latest financial results, I am in the majority. A surprising number of folks are using the “DTV Transition” as an excuse to plug their TVs into Comcast’s media network.
The unemployed need something to do
After adding 247,000 digital cable customers in the fourth quarter of 2008, Comcast boosted its subscriber base by another 288,000 households during the past three months. The additional revenue stream helped the company record a 5% boost in its bottom line, a net of $778 million.
Comcast’s news comes just a day after Time Warner Cable (NYSE:TWC) revealed a surge of 121,000 customers, almost three times as many as the previous quarter.
The news gives evidence the recent downturn in subscription growth has come to an end. It is a trend that will likely last for at least the next few quarters as competition levels off and the market regains some footing.
Whether you and I believe it is right, this nation views cable as a necessity. Comcast and its competitors are selling a fairly inelastic product. As long as they can offer a product that is comparatively priced with its replacements, subscribers will be knocking on their doors.
The way I see it, the higher the nation’s unemployment rate, the higher Comcast’s subscriber roles.
Sad but true.
Source: Comcast’s Profits: Sad But True
