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A Look at Comcast’s Capital Spending in 4Q17

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Capital expenditure in the fourth quarter

Comcast (CMCSA) has a high level of capital spending since it’s focused on enhancing its network capacity, improving its investment in line extensions, and enhancing its infrastructure and theme parks. In 4Q17, its capex (capital expenditure) increased 5.4% to $2.7 billion. Its cable segment’s capex rose 2.8% to $2.2 billion, and its NBCUniversal segment’s capex was $525 million, a 13.6% rise YoY (year-over-year) from 4Q16.

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Comcast’s high capital spending leads to high debt

Comcast’s increased level of spending on scalable infrastructure, its continued investment in theme parks, and more share repurchases and dividends have increased the company’s debt levels. Comcast is also making increased investments in customer premise equipment (or CPE), including X1 and wireless gateways, to boost its customer base. Like Comcast, Charter Communications (CHTR) also spends a lot on CPE and scalable infrastructure.

At the end of 2017, Comcast’s long-term debt was $59.4 billion compared to $55.6 billion in 2016. Media companies Viacom (VIAB), Time Warner (TWX), and CBS (CBS) don’t have high levels of debt. Viacom has a long-term debt of $10.1 billion, CBS has a long-term debt of $9.5 billion, and Time Warner has a long-term debt of $18.3 billion as of December 31, 2017.

Outlook for capex

For 2018, Comcast expects capital spending for its cable segment to increase as it continues to boost its network capacity. NBCUniversal’s capital spending is also expected to rise, driven by its continued investments in theme parks. However, the company expects spending on customer premise equipment to decline in 2018 since it has already deployed X1 to nearly 60% of its residential video base.

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