Mediacom Posts Loss, Lowers Guidance
The company also posted a net loss of $36.3 million, or 34 cents a share, which was an improvement from the net loss of $89.8 million, or 82 cents a share, in the year-ago period. However, analysts expected Mediacom to post a third-quarter loss of just a penny a share.
The MSO lowered revenue and adjusted OIBDA (operating income before depreciation and amortization) expectations for full-year 2007. The company now expects to see revenue growth of between 6.5 percent and 7 percent, versus 7 to 8 percent. Adjusted OIBDA is now expected to come in at between 4 and 5 percent, compared to earlier guidance of 6 to 7 percent.
Mediacom also raised expected capital expenditures for 2007 -- to $225 million from $215 million.
Mediacom shares dipped $0.68 (12.39%) to $4.81 in early trading Tuesday.
Mirroring a trend that has affected other cable operators, Mediacom also lost 13,000 basic video subscribers, including 3,000 from the sale of a "non-strategic" system, versus a loss of 6,000 basics a year earlier.
The MSO added 40,000 revenue-generating units (RGUs), a gain of 5.4 percent that extended Mediacom's total to 2.673 million.
Although RGU growth was softer than expected, the company said more profitable double- and triple-play customers are replacing video-only customers.
During the quarter, Mediacom signed on 9,000 new digital video subs, down versus 18,000 a year earlier. High-speed Internet customers additions also slowed, as Mediacom added 23,000 in the quarter, versus 28,000 in the year-ago period.
One bright spot was telephone service. Revenues in this category jumped 83.8 percent to $14.4 million, as the MSO signed up 21,000 new voice customers in the quarter, up from 17,000. As of Sept. 30, 2007, Mediacom offered phone service to 2.5 million of its 2.84 million homes passed.
— Jeff Baumgartner, Site Editor, Cable Digital News
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