Reduced forecasts by the top cable provider may be a sign of interference ahead for a broad range of communications providersAt the UBS Global Media & Communications Conference on Dec. 5, an analyst asked Michael Angelakis, Comcast's (CMCSA) new co-chief financial officer, why he left a cushy job at famed private equity group Providence Equity Partners for a position at Comcast. Angelakis may be wondering the same thing.
The night before, his new company issued a warning that it wouldn't add as many new subscribers as it previously had expected, and that revenue and cash flow would come in below previous forecasts. Analyst Todd Mitchell, of Kaufman Brothers, downgraded the stock to hold from buy, while Standard & Poor's analyst Tuna Amobi reaffirmed a sell rating on the shares. "This is just the beginning" of bad news and stock declines for the company, says Amobi of S&P (which, like BusinessWeek.com, is owned by The McGraw-Hill Companies (MHP)). Comcast shares tumbled 12%, to $18.18 on Dec. 5.
Price Undercutting: A Downward Spiral
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