Comcast: Oh, My, What CAPEX You Have


The nation’s largest cable company reported solid growth in digital subscriptions–Internet, VOIP, digital cable–even while shedding more basic cable subs than expected.  The company’s our-digital-pipe-is-fatter-than-yours war with Verizon, however, pushed capital expenditures up 56% year-over-year to $1.6 billion ($6.5 billion run-rate).  This pales before Verizon’s astonishing $17 billion in annual capex, but it’s still a humongous number.

Why does CAPEX matter?  Because it is eating most of Comcast’s operating cash flow.  Comcast’s cash-flow-from-operations (into which it bizarrely lumps securities sales) hit $4.4 billion for the first six months of the year.  But the company’s infrastructure costs are so high that they consumed almost all of this, knocking Comcast’s free cash flow down to $810 million.

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