Chris Blount
08-02-04, 06:22 AM
Cable's loss of basic subscribers during the second quarter led to a downgrade for a number of top MSOs Friday.
Aryeh B. Bourkoff of UBS Investment Research downgraded Comcast and Cox Communications to "neutral." The analyst placed a $31 price target on Comcast shares and a $30 target on Cox.
Bourkoff said he continues to see strength in cable's bundling of services, such as video, broadband and telephone. However, the second quarter showed weakness for the portion of the cable business serving unbundled basic video subscribers, and that indicates "an increased risk for cable in holding its market share of the core video business," the UBS analyst said.
Bourkoff added, "Satellite operators have shown that they are willing to spend more on subscriber acquisition costs (SAC) over the past year and are increasingly attacking the unbundled basic analog cable customers in our view. Given their singular focus on the video-only product, and their sound financial flexibility, we believe the satellite operators will continue to be aggressive on promotional activity, putting pressure on cable's core video business."
Meanwhile, another cable operator reported a loss of basic customers Friday. Insight said it netted a basic customer loss of 15,500, taking its total to 1.282 million customers as of the end of the second quarter. Insight also reported second quarter revenue of $250.6 million, an increase of 12 percent when compared to the same period in 2003, and a net loss of $7.527 million.
http://www.skyreport.com (Used with permission)
Aryeh B. Bourkoff of UBS Investment Research downgraded Comcast and Cox Communications to "neutral." The analyst placed a $31 price target on Comcast shares and a $30 target on Cox.
Bourkoff said he continues to see strength in cable's bundling of services, such as video, broadband and telephone. However, the second quarter showed weakness for the portion of the cable business serving unbundled basic video subscribers, and that indicates "an increased risk for cable in holding its market share of the core video business," the UBS analyst said.
Bourkoff added, "Satellite operators have shown that they are willing to spend more on subscriber acquisition costs (SAC) over the past year and are increasingly attacking the unbundled basic analog cable customers in our view. Given their singular focus on the video-only product, and their sound financial flexibility, we believe the satellite operators will continue to be aggressive on promotional activity, putting pressure on cable's core video business."
Meanwhile, another cable operator reported a loss of basic customers Friday. Insight said it netted a basic customer loss of 15,500, taking its total to 1.282 million customers as of the end of the second quarter. Insight also reported second quarter revenue of $250.6 million, an increase of 12 percent when compared to the same period in 2003, and a net loss of $7.527 million.
http://www.skyreport.com (Used with permission)