News summary for 11/08/07

Thu, 11/08/2007 - 8:37am
CED staff

Charter’s 3Q revenue up, but profits down 
By Mike Robuck

Despite posting double-digit pro forma revenue and pro forma adjusted EBITDA growth for the fourth consecutive quarter, Charter Communications saw its profits slip in the recently completed third quarter.

"We are pleased to be announcing double-digit pro forma revenue and adjusted EBITDA growth for the fourth consecutive quarter," said Neil Smit, Charter’s president and CEO, in a statement. "We will remain disciplined in our operating, marketing and capital investments targeted to continue growing the business."

Charter saw a 10 percent increase in revenue in the quarter, but that was offset by the nation’s third-largest cable company losing $274 million more during this third-quarter compared to last year’s.

Revenue from Charter’s video, high-speed Internet and telephone services all increased in the quarter to aid the company’s bottom line. Revenue for the third quarter topped $1.5 billion, which was a 9.9 percent increase from last year’s third quarter sales of $1.4 billion.

On the other side of the ledger, Charter had a $407 million loss, or $1.10 a share, in the most recent third quarter compared to a loss of $133 million, or 41 cents a share, in the same quarter last year.

Despite revenues increasing at a higher rate than operating costs and expenses, Charter said the net loss increase was primarily due to non-recurring gains in 2006 third-quarter expenditures when the company recognized a $128 million gain on debt exchange and a $200 million gain on the sale of discontinued operations.

Charter added 102,300 telephone customers in the third quarter for a total of 802,600 telephone customers.

The company lost 40,200 analog video customers while adding 15,800 digital video customers in the third quarter. Charter’s high-speed Internet customers increased by approximately 53,000 in the quarter.

Cablevision adds RGUs, posts net loss in Q3
By Traci Patterson

Cablevision Systems Corp. added 161,000 revenue-generating units (RGUs) in Q3, but the company posted a net loss of $79.3 million, an increase of more than $20 million year-over-year. For the nine months ended Sept. 30, though, the company reported a net income of $211.8 million.

Cablevision ended the third quarter with 3.1 million basic video subscribers, an increase of 11,000 compared with the year-ago quarter but a loss of 16,000 sequentially. iO digital video customers increased by 35,000 - to total 2.6 million.

Optimum Online high-speed data customers increased by 52,000 - to 2.2 million - and the total number of Optimum voice subscribers grew by 91,000 - to 1.5 million. Cablevision ended the quarter with 9.4 million RGUs.

Consolidated net revenue grew 9.4 percent, to $1.5 billion, compared with the year-ago quarter. The telecommunications services net revenues increased 9.6 percent year-over-year, to $1.2 million. Cable TV net revenues increased 9.7 percent compared with the year-ago quarter, to $1.1 million. Cablevision ended the quarter with $10.5 billion in net debt.

“For the third quarter, Cablevision experienced solid revenue and AOCF growth,” said James Dolan, Cablevision’s president and CEO. “This was primarily fueled by the continuing growth of our digital video, voice and high-speed data customers, which helped to maintain Cablevision's industry-leading penetration rates.”

Cisco reports record profit in Q1
By Brian Santo

Cisco reported first quarter net sales of $9.6 billion, up $1.4 billion from last year, and net income of $2.2 billion, up from $1.6 billion a year ago.

Despite an increase in the sale of its core routing and switching products, the company’s stock took a hit on remarks by CEO John Chambers that the company was seeing weakness in two customer segments: automotive companies and financial institutions.

Nonetheless, Chambers was optimistic: "We believe the migration to the second phase of the Internet and the proliferation of networked Web 2.0 technologies will help drive dramatic gains in productivity and innovation across all industries. If this market transition continues to unfold as we expect, it has the potential to power Cisco's and the industry's growth for many years to come."

During the quarter, Cisco announced an agreement to purchase WiMAX specialist Navini Networks, and bought Cognio and Latigent. The former does wireless spectrum analysis and management for wireless networks; the latter provides Web-based business intelligence and analytics reporting solutions, focused on contact centers.

Cisco also continued to refine its Carrier Ethernet products, part of its IP Next-Generation Network (IP NGN) architecture portfolio, extending fiber-to-the-home to apartment buildings and other multi-tenant units and allowing deployment of more services more quickly.

Cisco’s Linksys unit introduced eight new "smart switches" for small environments, corporate workgroups or network edge applications that require simple Web management, network security and easy installation.

Vyyo posts 3Q loss of $8.7 million
By Mike Robuck

Vyyo reported its financial results for the third-quarter that ended Sept. 20 today, which included sales of $2.6 million compared to $1.1 million in the same quarter a year ago.

The Norcross, Ga.-based company posted a loss of $8.7 million, or 47 cents a share, in this year’s third quarter, compared to a loss of $7.7 million, or 43 cents a share, in last year’s third quarter.

During the third quarter, cable revenues were $1 million, up from $326,000 in the second quarter of this year. In April, Vyyo announced that Cox Communications was deploying its spectrum overlay product in several areas to provision business services.

Vyyo ended the third quarter of this year with $19.2 million of cash and cash equivalents and short-term investments, which was down from $26.2 million at the end of this year’s second quarter.

Vonage, AT&T may settle; Vonage grows in Q3
By Brian Santo

Settling the patent infringement suits against it appears to have had a positive effect on Vonage Holdings’ third quarter financials. Vonage added 78,000 net subscriber lines during the quarter, finishing with more than 2.5 million lines in service.

Revenue grew to a record $211 million, up from $162 million in the third quarter 2006, driven, the company said, by customer line growth. ARPU was up year to year, to $28.24, from $27.59 in the year-ago quarter, but it actually dropped on a sequential basis, from $28.38 in Q2 2007.

The company’s loss narrowed significantly, from $63 million in last year’s Q3, to $16 million in the third quarter just ended.

Vonage Chairman Jeffrey Citron said, "We are executing against our strategy to fix the fundamentals of our business. We are acquiring customers more effectively and running the business at an improved cost structure."

During the quarter, Vonage paid $80 million to settle a suit brought against it by Verizon, put another $40 million into escrow pending further legal action associated with the Verizon suit, paid $80 million to Sprint, and another $2 million in other IP litigation settlements. Most of the money was taken out of cash.

Meanwhile, Vonage said it reached an agreement in principle with AT&T to settle yet another IP litigation suit. The general terms being discussed by the parties, Vonage said, would require Vonage to pay $39 million over five years.

OpenTV posts third-quarter loss of $8.2 million 
By Mike Robuck

OpenTV announced a loss of $8.2 million in the third quarter after posting a loss of $1.8 million a year ago in the same quarter.

OpenTV, a provider of products for digital television and cross-platform interactive services, saw its sales drop from $25 million in last year’s third quarter to $23.7 million in the quarter that ended Sept. 30 for a decrease of 5 percent. Services and other revenues decreased 3 percent when compared to the same quarter last year.

OpenTV COO and acting CEO Ben Bennett said the company’s revenue “was soft in the third quarter,” but pointed to a deal this week with India-based Reliance Communications as a sign of progress. The San Francisco-based company also renewed license agreements with UPC and EchoStar.

Tellabs CEO and president to resign 
By Mike Robuck

Krish Prabhu has informed the Tellabs board of directors that he will resign as the company’s president and CEO by March 1. Prabhu had served as Tellabs’ president and CEO since 2004.

"The Tellabs team has successfully broadened the product portfolio, established new relationships with large service providers, and made progress in repositioning the company," Prabhu said, in a prepared statement. "This is the right time for a new leader to begin the next chapter at Tellabs."

Tellabs’ board also authorized an additional $600 million for the company's common stock repurchase program, in addition to a remaining $176.1 million under a repurchase program authorized last year. Together, the authorizations cover about 22 percent of Tellabs’ shares outstanding, at yesterday's closing price.

Products from Tellabs are used by service providers to deliver voice, video and data services over wireline and wireless networks.

Broadband Briefs for 11/08/07

* CableNET now accepting demo proposals
By Brian Santo

CableNET is accepting proposals for demonstrations in the organization’s showcase at The 2008 Cable Show in New Orleans from May 18-20, 2008.

CableNET is designed to highlight a wide variety of next-generation broadband services as well as technologies that cable operators are expected to deliver to consumers in the near term. Past CableNETs have showcased early generations of interoperable cable modems, voice-over-Internet Protocol (VoIP), and OpenCable Platform advanced interactive digital video technology prior to consumer market deployment. These technologies now serve as platforms for new businesses for cable operators.

* TiVo adds first Power||Watch partner
By Traci Patterson

TiVo Inc. has added its first media agency partner, Starcom USA, for the company’s Power||Watch Consumer Panel, which provides advertisers access to anonymous demographic and viewing behavior data for the 20,000 volunteer households.

"The Power||Watch Consumer Panel is a landmark step in gaining deeper insights into audience behavior in the growing world of DVR-based television consumption and how best to earn the attention of consumers in a time-shifted world," said Tracey Scheppach, Starcom’s SVP and video innovation director.

* AT&T’s U-verse hits central Texas 
By Traci Patterson

AT&T Inc. has launched its U-verse service in parts of several central Texas communities, including Austin, Pflugerville and Round Rock.

AT&T’s U-verse service offers IPTV and high-speed Internet services over the company’s fiber network. U-verse includes more than 30 HD channels, Yahoo! high-speed Internet.



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