United Video Satellite Group Inc. impressed investors last
week with big fourth-quarter gains in quarterly cash flow and net income, sending its
share price higher.
The Tulsa, Okla.-based company, mostly owned by
Tele-Communications Inc., reported that its fourth-quarter net income rose 76 percent, to
$13.2 million, or 35 cents per share of stock, from $7.5 million (20 cents per share) in
the same period a year ago. Cash flow rose 62 percent, to $29.4 million from $18.1 million
a year earlier.
Revenue, meanwhile, was flat at $130.7 million. Prevue
Networks Inc. helped to lead the way, driving revenue up by 27 percent, to $17.4 million
from $13.7 million. Prevue's cash flow rose 39 percent, to $6.1 million from $4.4
million a year ago.
UVSG's stock price rose $2.75 (8 percent) last Tuesday
-- the first trading day since the earnings were released after markets closed the
previous Friday. UVSG also announced programming changes at The Prevue Channel last
Prevue Channel's distribution rose about 8 percent
year-over-year, to 47.5 million subscribers, spokesman Scott Knowles said. Ad revenue at
the network surged by 50 percent, to more than $10 million, he said.
'It was fairly good news across the board,' Media
Group Research analyst Mark Riely said.
Prevue has managed to increasing paying advertising minutes
and, at the same time, to raise what it charges advertisers on a CPM (cost per thousand
UVSG officials who spoke to analysts on a conference call
last Tuesday also indicated that they plan to try to wring better cash flow out of Sneak
Prevue, a pay-per-view barker channel that is now in about 35 million homes, Riely said.
UVSG's Superstar unit was able to raise rates on some
of its C-band programming packages Jan. 1, Riely and company officials said. UVSG's
UVTV unit distributes superstation WGN-TV, and Superstar also passed along higher
wholesale WGN charges to Superstar/Netlink Group. Even though higher wholesale charges
decreased Superstar's revenue (and raised revenue at UVTV), Superstar's cash
flow rose 19 percent in the quarter, to $14.3 million.
In a statement, UVSG chairman and CEO Gary Howard said the
strong results 'allow us to continue our stated pursuit of investigating business
opportunities in which we are able to capitalize on our existing strengths in order to
secure leadership positions in developing technologies and entertainment products.'
He cited the recent agreement on a joint venture to merge
interactive guides with Gemstar International Group Ltd. as an example. UVSG will control
that venture, with 51 percent equity, and it managed to sweep away litigation with Gemstar
in the process.
Riely said UVSG officials implied that acquisition news
might be announced within days. Knowles confirmed that UVSG president Peter C. Boylan III
said there could be 'announcements' within a few days of last Tuesday's
conference call. Knowles said he could not comment further on what those announcements
For the full year, UVSG's consolidated cash flow was
up 45 percent, at $104 million, and net income rose 52 percent, to $45.8 million. Earnings
per share have risen at a five-year compound annual rate of more than 50 percent, the
company said. Revenue rose 16 percent during the year, to $437.2 million.