Comcast's ( CMCSA) gleaming image shatters as competition drags the cable giant into a price scuffle.
The Philadelphia cable shop cut its cash flow target for the year as phone companies and satellite players show they can pick off Comcast customers more easily than expected. Suddenly the sales growth in new services like broadband and phone has slowed. The number of new services sold or revenue generating units fell to 1.4 million, down from 1.5 million last quarter. Instead of seeing pressure from one large rival, the competition was more "product specific," says one industry investor. In video, Comcast took a beating from the satellite broadcasters EchoStar ( DISH) and DirecTV ( DTV). And telcos like AT&T ( T) and Verizon ( VZ) pushed hard on phone and fast Internet services, says the money manager who owns no Comcast. "The concern as an investor is that the impact from competition will only grow," says the money manager. Attempting to keep sentiments positive on the stock, Comcast said it would boost its share buyback plan by $7 billion, though there was no specific timeframe announced. For the third quarter, Comcast made $560 million, or 18 cents a share, down from the year-ago $1.22 billion, or 38 cents a share. Revenue rose 21% from a year ago to $7.78 billion.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.