No Surprises from Insight in 1Q

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Insight Communications Co. Inc. reported in-line first-quarter results Monday, with basic subscribers up by 25,100 and revenue and cash flow growth of 12% and 4%, respectively.

The subscriber results came as no surprise mainly because Insight released preliminary first-quarter results in April.

Aside from the basic-subscriber growth -- its highest quarterly growth ever -- Insight also showed strong growth in advanced services, with digital customers up by 41,700, high-speed-Internet subscribers up by 44,400 and telephone customers up by 9,800.

About 35% of Insight’s telephone customers are circuit-switched. On a conference call with analysts, president and chief operating officer Dinni Jain said the company plans to roll out voice-over-Internet-protocol telephony across its entire footprint by the end of this year.

Chief financial officer John Abbot said on the call that the MSO’s sluggish cash-flow growth was attributed to increased expenditures on sales and marketing, up $27 million, or 17%, during the period.

Abbot added that much of that increase was due to one-time costs -- for example, Insight created a central operations group to support the telephone product, which it won’t have to do again.

“We undertook this plan to invest in the business, however, knowing that after this one-time step-up in expenses, we’d be in a position to not only continue our strong revenue growth, but also see that same growth or better in [cash flow],” Abbot said on the call.

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