Cable Operators

Wachovia Analyst Awaits Comcast Rally In Second Half

7/13/2007 8:00 PM Eastern

Wachovia Securities cable and satellite analyst Jeff Wlodarczak maintained his outperform rating on Comcast last week, predicting solid second-quarter results are ahead in what is typically a seasonally weak period.

Comcast, expected to release quarterly results July 26, is seen as losing about 30,000 basic video customers in the period, mainly as customers disconnect service and shift to summer homes.

Wlodarczak also expects 390,000 high-speed data customer and 525,000 telephony customer additions.

He expects that digital customer additions will be about 750,000, well ahead of consensus estimates of 675,000.

Wlodarczak also predicts revenue will rise 12% in the quarter, to $7.32 billion, and operating cash flow will tick up 14.5%, to $3.06 billion.

“Bottom line: We expect a healthy rally in the shares in front of a likely record [third quarter],” he wrote.

“As is typical around [second quarter] results, Comcast share rally has paused after a 63% run in 2006,” Wlodarczak wrote.

“We believe the shares are poised to resume their march higher.”

Fueling that march is Comcast's industry leading revenue growth, especially in residential and small business telephony and high-speed data; healthy margin expansion in its triple play bundle; and its inexpensive valuation, Wlodarczak wrote.

September