Cable Operators

CSG Lowers Guidance in Wake of Comcast Deal

Pricing Adjustments Lower Revenue, EPS Expectations 3/27/2013 8:26 AM Eastern

CSG Systems International lowered its 2013 revenue and cash flow guidance Wednesday after landing a long-term deal with the largest MSO in the country, Comcast.

CSG had been operating on a month-to-month extension with Comcast after its last master services agreement expired on Dec. 31, 2012, according to documents filed with the Securities and Exchange Commission March 27. On March 26, CSG entered into a new four-year master services agreement with Comcast, but because of pricing adjustments in the new deal, CSG anticipates its 2013 revenue from the nation’s largest MSO could decline about 10%. Comcast accounted for about 20% of CSG’s total revenue in 2012.

As a result, CSG lowered its 2013 revenue guidance from between $755 million and $775 million to between $740 million and $760 million. Earnings per share are now expected to range between $2.05 and $2.15 instead of the previously forecasted $2.23 to $2.33 per share. Cash flow is now expected to be between $153 million and $158 million, instead of $162 million to $167 million, the company said.

CSG shares were down as much as 6% ($1.15 each) in early trading Wednesday to $19.11 per share. The stock regained that ground in subsequent trading and closed at $20.75 each on March 27, up 49 cents each or 2.4%.

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