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April 12, 2007

Comcast CEO Gives Bullish Interview

Comcast shares are traded up sharply yesterday in a lousy tape following publication of a couple articles on Bloomberg reviewing an interview with CEO Brian Roberts. Roberts is reiterating comments he made several weeks ago at a Wall Street conference indicating that he is “more confident” now than he was in February when the company issued guidance about the company’s growth prospects. Roberts says “Right now, it’s all clicking, everything is on fire.”

I have been adamant that investors overreacted to the higher than expected 2007 capital spending number that was part of the 2007 guidance. Investors completely ignored that the higher than expected spending was in response to higher than expected subscriber growth. Furthermore, there were no indications that the faster growth was being driven by lower margins. The message finally seems to be getting through.

Despite the lift in Comcast shares I still think that the stock should be owned ahead of the company’s earnings report late this month (see bottom of this post). I think Roberts' latest comments suggest that the numbers will be quite good, likely ahead of analyst estimates in all key financial and subscriber metrics. This would be enough to push Comcast back to or above its all-time high of $30 reached in mid-January.

Posted by Steve Birenberg at April 12, 2007 09:58 AM in Comcast/Cable TV