Economy watching: Comcast earnings waaaay up

November 4, 2008

Tracking the economy has been a thankless job lately. Things go down, you draw conclusions, things go up, you draw different conclusions, then things get all messy again and all bets are off.

But one thing will hold true in this recession: consumers love them some video, preferrably free video.

I wrote about this in a Forrester Report which I blogged about recently. Which is good for online video, and probably even good for cable generally. However, I did have some warnings to offer cable companies which are future oriented — that consumers will shy away from premium content packages and premium tech for the home (like multi-room DVR). Because of that, you won’t see the effect of the recession on this quarter’s earnings. So I may yet prove right in a way that affects cable’s financial performance. But for now, things couldn’t look shinier for one Comcast.

Betsy Schiffman captured this nicely at the Epicenter blog on last week in what is definitely going down as one of the best titles ever:

Cockroaches and Comcast Will Inherit the Earth

Her clever reference to the fact that cockroaches are suspected of being able to withstand just about any devastation that we could wreak on the planet, may overstate the case for cable a tad, but only a tad if you consider that Comcast CEO Brian Roberts was able to report on beating earnings per share estimates by a full 4 cents, and seeing a 38% rise in profits over last year. 

The point here is that cable holds most of the right cards for surviving the digital video transition. As long as it plays them right. In the case of Comcast, one of those cards is very strong financing from their own operations. No need to go out to get cash in a credit-squeezed market. That’s a great hand to have right now as economic ups and downs continue their game of ping-pong.