Comcast Stock: It Gets Worse


Comcast stock moved higher on Wednesday after posting well-received quarterly results. Revenue, earnings, and free cash flow all moved higher. However, a problematic nugget in Comcast's report is that video customers continue to cut the cord.

Comcast closed out the first quarter with 60,000 fewer cable television customers than it started with. It's lost 359,000 video customers over the past year.

It's not just Comcast. Traditional cable providers continue to suffer net defections. Time Warner Cable shed 119,000 video subscribers during the first quarter of the year. Cablevision reports quarterly results in a few days, but it did shake 53,000 video customers through 2012.

Comcast stock has been ignoring the trend, hitting a fresh all-time high last month. Bulls will argue that the company has diversified its business dramatically with the NBCUniversal acquisition. Cable providers have also been able to grow their Internet access and broadband phone services to offset the decline in video customers, but those bundling gains can't go on forever.

In this video, longtime Fool contributor Rick Munarriz argues that Comcast stock is cruising for a bruising. Comcast may be proud that its video customer is now paying an average of $155 a month -- up 8% over the past year -- but this also means that they will eventually get fed up at a time when there are so many viable options.

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Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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