The rebuilds are over for Comcast ( CMCSA). But the capital expenditures aren't going away as quickly as some investors would like.

The nation's largest operator of cable systems -- a company not in the habit of springing unwelcome financial surprises on Wall Street -- caused a minor disturbance Thursday with higher-than-expected fourth-quarter capital expenditures and capex forecasts on the high side of prior indications.

The capex issue on Thursday revived longtime concerns about the cable industry's ability to generate free cash flow -- that is, cash flow from operations after interest expense and capital expenditures have been subtracted out.

Over the past few years, free cash flow growth at Comcast and at other cable operators has been hampered by capital spending on upgrading the cable plant to a two-way, interactive, fiber-optic-laden cable infrastructure.

Operators have promised not only that capital expenditures would decline as a result, but also that they won't have to rebuild their rebuilds.

But while capital expenditures devoted to rebuilding have come down, they appear to have popped up in other areas -- for example, the purchase of souped-up cable boxes featuring digital video recorders. Comcast, which had forecast $3.3 billion to $3.4 billion in capital expenditures for 2004, says it overshot the high end by $200 million mainly because of a fourth-quarter purchase of advanced set-top boxes.

Comcast shares closed Friday at $32.13, up 17 cents from where they closed on the eve of the Thursday earnings release.

Articulating the capex concerns Friday -- but taking issue with them -- was Doug Shapiro of Banc of America Securities.

In a report issued Friday, Shapiro cited capex concerns as the apparent reason that Comcast's shares didn't rise more than they did in the wake of Thursday's numbers.

"The guidance of $3 billion in 2005 was a little higher than our prior estimate of $2.85 billion," wrote Shapiro. "It was at the high end of the $2.5 billion-$3 billion range provided early in 2004, and we believe it was also near the top end of the Street range (apparently some analysts were still near $2.5 billion)."

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