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Data leads the charge for Mediacom's Q2 earnings

Fri, 08/06/2010 - 8:25am
Mike Robuck

Mediacom Communications' second-quarter revenues were 3.4 percent higher than the same quarter a year ago, but the company ended the quarter with a loss.

Mediacom's revenues were $377 million for the quarter that ended June 30. Mediacom posted a second-quarter loss of $3.8 million, or 6 cents per share, compared with prior-year earnings of $34.5 million, or 51 cents per share. The second quarter included $29.1 million in derivative losses, compared with $26 million in gains a year ago.

Analysts polled by Thomson Reuters had forecast earnings of 21 cents per share, or $374 million in revenue.

The nation's eighth-largest cable operator saw its operating income come in at $77.2 million, which was essentially flat compared with the second quarter of 2009.

Mediacom's free cash flow decreased by 51 percent to $14 million, or 21 cents per share, compared with $28.5 million, or 42 cents per share, a year ago. Mediacom said the decrease in free cash flow was partially due to a $9.8 million increase in capital expenditures.

Mediacom's revenue-generating units (RGUs) grew 15,000 for the quarter and 91,000 year-over-year, representing a 3 percent annual gain.

Like other recent cable operator earnings reports, Mediacom posted solid gains with its data subscribers but bled out more basic video subscribers during the seasonal slowdown.

Mediacom's data revenues rose 10.4 percent, mainly due to a year-over-year gain of 60,000 new subscribers, with 10,000 of those coming in the second quarter. Mediacom had 814,000 data subscribers for a penetration rate of 29 percent.

The company's video revenues declined by 0.6 percent, primarily due to the loss of 18,000 basic video subscribers. Mediacom lost 15,000 basic video customers in the year-ago quarter.

The drop in basic video subscribers was partially offset by the gain of 6,000 digital video subscribers, as well as increases in demand for DVR and HD services. Mediacom ended the second quarter with 705,000 video customers, with a penetration of 58 percent. Year-over-year, Mediacom gained 47,000 digital customers for a 7 percent growth rate.

Mediacom's phone revenues grew 10 percent, largely due to a year-over-year increase of 50,000 phone customers, or 18.7 percent, offset in part by higher levels of discounted pricing. The company gained 17,000 phone customers to end the quarter with 317,000, a 12 percent penetration of estimated marketable phone homes.

Mediacom's advertising revenues rose 14 percent, primarily due to increased local advertising sales, largely a result of a rebound in automotive and political advertising sales.

Mediacom's board of directors is mulling an offer to take the company private by founder and CEO Rocco Commisso.

More Broadband Direct 8/06/10:

•  Data leads the charge for Mediacom's Q2 earnings
•  Google, Verizon deny net neutrality report
•  FCC to open spectrum for wireless backhaul
•  On the Call: TWC's Britt, Cablevision's Seibert
•  Consumer demand boosts cable, satellite TV profits
•  Motorola Foundation kicks in $100k to Cable Center lecture series
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