Comcast's Pain Continues

A heat-up in video rivalries further cools the cable giant's sales of new services.
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Comcast

(CMCSA) - Get Report

continues to lose ground in the triple-play race as phone and satellite rivals push their own juiced-up services.

The Philadelphia cable giant lowered its targets in key performance areas such as sales of new services and cash flow generation. Comcast said late Tuesday that growth of revenue generating units, or the number of new services such as phone, video and Internet, will be about 6 million for 2007, below the 6.5 million previously forecast.

The slowdown will cut into operating cash flow growth, with Comcast now predicting a 13% increase over 2006 levels. Prior guidance was for 14% growth.

This is the second downward adjustment in so-called RGUs and cash flow in the past two months as Comcast feels the pinch from competitors.

Video rivals including

EchoStar

(DISH) - Get Report

and

DirecTV

(DTV)

have used expanded high-definition programming in order to reel in flat-panel TV owners.

And phone companies such as

AT&T

(T) - Get Report

and

Verizon

(VZ) - Get Report

have bundled video into their broadband and phone service offerings, giving cable customers more options at competitive prices.

Cable giants Time Warner Cable

(TWC)

and

Cablevision

(CVC)

have also felt the pressure. Both cable shops reported a slowdown in revenue generating unit growth in the third quarter.

This has been a

disturbing trend for investors, made worse by the need for the cable companies to spend more money to keep up with the competition.

Comcast now says it will lay out $6 billion on capital expenditures this year for equipment such as new set-top boxes. That's an increase of 5% over the prior budget forecast.

Comcast shares fell $1.73, or 8%, to $19.00 in premarket trading Wednesday.