Adjusted operating cash flow plunged 44% at Cablevision Systems in the fourth quarter, driven mainly by losses incurred in the aftermath of Superstom Sandy, which devastated the entire East Coast in October, causing billions of dollars of damage in several states and taking more than 125 lives in the eastern part of the country.
Cablevision, which operates mainly in Long Island, N.Y. and the New Jersey shore, two areas hit hard by the storm, lost 50,000 video customers in the quarter, helping to drive revenue down by 1.6%. AOCF dipped 44% to $349.6 million and operating income was down 91.5% to $29.3 million.
The poor results sent some investors for the exits. Cablevision stock was down by more than 10% ($1.56 each) in early trading Thursday to $13.91 per share.
Excluding these items, consolidated net revenues would have increased 0.3% while AOCF and operating income would have decreased 18.4% and 48.7%, respectively, all compared to the prior year period.
According to a statement, Cablevision noted that the overall video losses include 10,000 customers that are located in the areas most severely impacted by Superstorm Sandy who the company has been unable to contact and whose billing Cablevision has decided to suspend temporarily during restoration of their homes.
“In addition, we suspended our normal collection efforts and non-pay disconnect policy during the storm and estimated the number of accounts that we believe would have been disconnected had we not suspended our policy,” Cablevision said in a statement. As a result the MSO reduced its video customer relationships by 24,000; its high-speed data customers by 23,000 and its voice subscribers by 19,000.
On a conference call with analysts, CEO James Dolan called the storm the “most dramatic weather event in company history,” and detailed the company’s efforts to restore service to its devastated footprint.
Dolan said that nearly 60% of Cablevision’s Optimum East residential customers were without service in the aftermath of the storm, mainly due to power outages. Cablevision repaired about 450 miles of damaged cable at more than 16,000 locations, about 90% of its 63 headends ad hub locations lost power and were transferred to generators. The MSO also deployed more than 1,000 portable generators to power portions of its network until power was restored.