Earlier quoted context omitted.
Comcast is reporting 20% operating income for a network that is largely already paid for . There's reasons to believe that Verizon isn't doing a great job recouping it's up-front costs on FiOS: http://www.businessweek.com/magazine/content/11_13/b42210461... . For the FiOS rollout, the capital costs alone are $1,000-2,000 per house: http://nypost.com/2010/04/01/why-i-think-verizon-had-to-pull... . There's no reason to…
How is that income figured exactly. I mean, doesn't every major movie seem to lose money even after raking in billions? I just don't trust any number from Comcast without a large volume of information on how those numbers were calculated. And at that, that doesn't explain how Comcast even stayed in business till that point? Were they allowed to install their networks at a loss? Are there costs artificially high? Are…
Their revenues were $8.15 billion (just over $100 per customer, for the whole year). $5.35 billion in operating costs, and $1.85 billion in depreciation and amortization (the loss in value of the capital in the ground). $925 million in net income on that revenue (11%).
What's really shocking is that their revenue per customer relationship is under $130 per year. That's the result of something else pundits ignore: cable company franchise agreements require them to build out to neighborhoods where many subscribers just get basic cable, which is usually subject to a regulated rate of just $10-20 dollars/month.
Looking at just the ISP business makes the numbers look worse. $4 billion of the revenue is from video, while $2 billion of the costs are for programming (see page F-10). If you take out the video revenue, you're down to $4.15 billion in revenue, with about $5.15 billion in expenses (i.e. you're losing a billion dollars a year).
Ultimately, of course, after paying interest on debt Charter lost money for the year. The idea that cable companies are wildly profitable is an HN myth.