Sub Losses, Cash Flow Down at Mediacom

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Mediacom Communications Corp. reported mixed results in the second quarter, reducing basic-subscriber losses but posting declines in cash flow.

The MSO lost about 15,000 basic customers during the period compared with losses of 42,000 in the same period last year. Digital subscribers grew by 82,000 year-over-year (or 25,000 sequentially), while high-speed-Internet additions were 19,000 sequentially (99,000 year-over-year), below most analysts’ expectations.

Mediacom launched its telephony service in June, and it did not release subscriber figures. However, executive vice president of operations John Pascarelli said the company has high expectations for the service.

He said that phone service is currently launched in two markets and the company is in active prelaunch testing in 10 additional areas. Pascarelli added that early results are positive, and that the service will be available to nearly 1.5 million households by year-end.

Revenue for the period rose 3.6% to $277.3 million. Cash flow declined 2.7% to $105.5 million.

Mediacom also raised its capital-expenditure guidance for the year from $200 million-$210 million to $210 million-$215 million, mainly to account for greater-than-expected demand for digital-video-recorder and HDTV service.

However, because those products are usually part of a discounted package, Mediacom did not raise its revenue and cash-flow guidance, which remained at $1.09 billion-$1.1 billion and $415 million-$425 million, respectively, for the year.

On a conference call with analysts, chairman and CEO Rocco Commisso said the discounts were made to meet competitive pressures.

“As these promotional units come off these 12-month programs, we expect them to become Mediacom customers and to also see a jump in revenues,” he added.

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