This graph depicts the probable culprit for the low prices of cable stocks: a pattern of expanding capital expenditures. The analysts at Smith Barney have produced a graphic depictions of promises made and not kept (I hope Tessa - my graphics star daughter - doesn't attempt the same about me).
While capital expenditures have continued at a surprisingly high level, the dramatic improvements in data speeds and additional telephony income has certainly paid its way. In another post (imaginatively titled "Cable Profitability), I depict the significant margin expansion available for cable when connectivity charges go away as the business matures.
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