Mediacom Sees Smaller Q3 Loss
Profitability continues to elude the regional cable carrier, which Wednesday stated a quarterly loss of 2 cents a share, or $2.7 million. That's an improvement over the year-ago quarter when Mediacom reported a loss of 11 cents a share, or $12.8 million. And executives say the company is making solid gains in high-speed data and digital video subscriptions.
“Driving revenue growth was our strategy to extend discount pricing to customers coming in to our digital and data products,” CEO Rocco Commisso said.
Mediacom posted 5 percent growth in overall revenue this quarter -- $275 million compared with $261 million a year ago -- but that didn’t quite match the $278.9 million projection of analysts surveyed by First Call. Commisso said revenue took a hit of $1.5 million from Hurricanes Katrina and Dennis.
Growth was also impeded by a drop in average monthly data revenue per customer, which decreased 2.2 percent from a year ago. Commisso said the company expects to see these revenue figures improve as customers move into standard pricing and upgrade to higher-priced data offerings.
The revenue growth that did occur was due primarily to a 27 percent increase in high-speed data revenue, Commisso said. Since September 2004, the company has added 103,000 high-speed data subscribers, 27,000 of those coming this quarter.
As Mediacom continues to court data customers, officials say bundling will play a big role. In June, the company began offering VOIP services as the final product in its triple-play offering; by the end of September, it had garnered 8,000 telephone subscribers. In addition, Commisso said the company is marketing to 1.2 million homes and has achieved 4.6 percent penetration of homes passed with VOIP services.
“As we move in with the phone launch, our strategy is to use the consumer savings from our [bundled] products as an offset to the discounts that we used to give,” said John G. Pascarelli, executive vice president of operations.
During the earnings call, company officials offered revised guidance for yearly capex and revenue figures. Whereas the third quarter brought capex to $67 million, largely due to one-time hurricane-related costs, Mediacom said its fourth-quarter capex should be $49 million, bringing the year's total to $228 million.
The company expects revenues for the full year 2005 to be $1.1 billion. Analysts are expecting Mediacom to report a loss of 9 cents a share, on revenues of $1.1 billion for the full year 2005, according to First Call.
— Joe Tuzzo, special to Light Reading