According to Stop The Cap, GM Is Financially Sound

I've been participating in a discussion on stopthecap.com where a common anti-cable company talking point was brought up: Time Warner Cable (TWC) made $1.1B last year from high speed data (HSD). The argument is that they're greedy as hell because that $1.1B isn't being used to lower prices or reinvest in the network.

Now, I'm not going to try to argue the price point itself (I feel like it's too high). Why? Because the core of the argument is fundamentally flawed.

They point to TWC's 10-K filing wherein it states clearly that HSD revenues are $1.1B. Oh, they really got TWC this time! Except that they don't understand that revenue is different from profit.

GM's revenues in Q1'09 are $22.4B. My goodness! $22.4B and they're asking for a handout from the Government?! 

For those who aren't aware, revenues are total income from products or services sold. Profit, on the other hand, is revenue minus costs. When you factor in GM's costs, they are operating at a $6B deficit for Q1'09. That means they spent $6B more than they brought in.

TWC's 10-K filing doesn't break down profit and loss on a per product basis. But you can take a quick look at their total revenues and compare them to Operating Income Before Depreciation and Amortization (OIBDA) to get a better picture. Revenues were $4.36B and OIBDA is $1.46B. That means that $3B of their revenues went to stuff other than operating income. In other words, they're not raking it in quite as much as that revenue figure shows.

But maybe the Stop the Cap folks can work out a new way for a business to succeed on revenue alone....