Dykstra: Comcast Redux

Comcast (CMCSA Quote) shares dropped Friday with the market correction, closing at $40.82. The stock, which I suggested an in-the-money call trade on last week, has fallen back into its trading range from November before the recent breakout: $39.13 to $41.20.

In its earnings report on Feb. 1 the company reported that quarterly revenue rose 23% to $7.03 billion, with the biggest subscriber growth period in the company's history. Comcast is a pure play on what's known as the "triple play" in bundled services: cable, broadband and digital voice, all in one package.

On that conference call, CEO Brian Roberts said Comcast had an opportunity to grow faster in 2007, supported by investment, and he went on to forecast revenue growth of at least 11% in 2007, which was in line with market expectations, but its estimate of $5.7 billion in capital expenditure was above the average analyst forecast of $4.8 billion, according to Reuters estimates.

The company said most of the spending will be to accelerate the introduction of new products like high-definition video, and to boost its relatively new business of selling services to small and medium companies. ...