Mediacom posts 64% increase in profit for Q2

Fri, 08/07/2009 - 8:35am
Mike Robuck

Add Mediacom Communications to the list of cable operators that have posted positive results during recent earnings reports. The nation’s seventh-largest MSO pegged a 64 percent increase in profit for the quarter.

Mediacom earned $34.5 million, or 49 cents per share, compared with $20.9 million, or 22 cents per share, a year ago.

Mediacom’s revenues were $364.5 million, compared with $349.5 million in Q2 2008, which Mediacom said was largely due to a 6 percent year-over-year increase in revenue-generating units (RGUs).

Other second-quarter highlights include:

  • Adjusted OIBDA rose 5.1 percent to $136.8 million
  • Operating income increased 11.1 percent to $77.1 million
  • Free cash flow rose 480 percent to $31.1 million, or 46 cents per basic weighted average share

“In one of the most difficult economic environment in decades, Mediacom continued to produce solid financial results,” said Mediacom Chairman and CEO Rocco Commisso. “Our healthy growth rates in revenues and adjusted OIBDA, along with tight control of operating costs and capital expenditures, enabled us to achieve record free cash flow.

“For the first half, we have already generated over $62 million of after-tax free cash flow – a five-fold increase from the same period last year – representing about $0.84 per basic weighted average share. Consequently, we are comfortable raising our full-year free cash flow per share guidance by 30 percent to at least $1.30 per share.”

Mediacom’s video revenues increased 2.8 percent, primarily due to digital customer growth and, to a lesser extent, higher service fees from its advanced video products and services, including DVRs and HDTV.

Continuing a trend among cable operators, the company lost 15,000 basic subscribers in the second quarter, while losing 14,000 basic subscribers year-over-year.

On the plus side, Mediacom added 8,000 digital customers to end the quarter with 658,000 customers, for a 51.3 percent penetration of basic subscribers. Year-over-year, the company added 69,000 digital customers. As of June 30, 36 percent of Mediacom’s digital customers were taking DVR and/or HDTV services.

Mediacom said its high-speed data revenues rose 12 percent, mainly due to a 9.4 percent year-over-year increase in high-speed data customers – or 65,000 – and, to a lesser extent, higher unit pricing. The company added 6,000 high-speed data customers to end the quarter with 754,000 customers.

Mediacom’s phone revenues grew 27 percent, thanks to a 22 percent year-over-year increase in phone customers, as well as higher unit pricing. During the quarter, the company added 8,000 phone customers to end the quarter with 267,000.

Mediacom did say its advertising revenues were down 7.6 percent, primarily as a result of lower local advertising sales, particularly in the automotive segment, but that was partially offset by higher national advertising sales.

The company’s total operating costs grew 5.6 percent, primarily due to increases in programming unit costs.

More Broadband Direct 08/07/09:
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