Is Comcast About to Turn?

But despite its operating successes, the company's CEO Brian Roberts refused to discuss details of the company's ongoing discussions with General Electric (NYSE: GE)
regarding the possible combination of the largest cable multi-systems
operator and GE's NBC Universal. The combination is expected to be
approved within the next few weeks, but there remain a number of
possibilities that haven't been described publicly.

As to Comcast's quarter, the company continues to watch some of its
video subscribers peel away, while its high-speed data and telephone
service are growing, albeit at a slower pace than before. In the most
recent quarter, for instance, video customers dropped by 2.7%, while
high-speed Internet subscribers grew by 6.4%, and voice customers
climbed by 20.3%. Total revenue generating units (one customer taking
one service) expanded by 4.5%.

It appears that, at least from Comcast's perspective, there clearly
is strength in the cable industry. For instance, Comcast's revenue per
video customer rose 5.6% to an average of $116.91 per month, from
$110.67 in the third quarter of 2008. At the same time, the company's
free cash flow increased to $1.1 billion, from $928 million on a
year-over-year basis.

So why have the cable operator likes of Comcast, Time Warner Cable (NYSE: TWC), and Cablevision (NYSE: CVC)
been treated so shabbily by the market during the past year? My
response, as someone who once followed the industry as an analyst,
involves the investment community perpetually dredging up competitive
boogeymen for cable.

Earlier in this decade, the DSL offerings of the telephone companies
were thought to be breathing down the necks of the cable operators'
Internet product -- a threat that since has been put to sleep. And
lately, the perceived threat has come from the triple-play offerings of Verizon (NYSE: VZ) and AT&T (NYSE: T), or video from satellite operators like DirecTV (Nasdaq: DTV).

In my opinion, Comcast is driven by an unusually strong management
team. In part for that reason, my advice to Fools with a media bent is
to watch the company closely. It's mistreatment by Mr. Market has been
overdone, and stands an excellent chance of being reversed well within
your investment time horizon.

© 2009 UCLICK, L.L.C.