Suddenlink’s Q1 2013 revenue was up 6.4 percent compared to the company’s earnings in its first quarter last year, driven largely by gains in the broadband sector, rate increases and, for one more quarter at least, the ability to buck the general trend of basic video subscriber losses.
The company noted that its capex spending would increase with the adoption of its own telephony platform, a process that began in March and is planned to be implemented largely in 2014. A Suddenlink spokesman said the company is not ready to share details about the system being adopted or the transition process.
The company added about 700 basic video subscribers, approximately 15,600 digital video customers, about 24,100 broadband subscribers, and about 5,800 telephony subscribers during the quarter. That swelled the company’s total number of revenue generating units (RGUs) to about 3.6 million at the end of the quarter, up 2.7 percent from the first quarter of 2012.
Suddenlink said it had approximately 1.4 million residential customers at the end of the quarter, representing 1,211,900 basic video, 853,100 digital video, 1,026,200 residential high-speed Internet and 477,500 residential telephone customers. Approximately 64.8 percent of Suddenlink's residential customers subscribe to bundled services, compared to 62.7 percent a year ago, the company reported.
Suddenlink's ARPU for the first quarter of 2013 was $148.59, an increase of 9.7 percent compared to the first quarter of 2012.
In addition, as of March 31, 2012, Suddenlink served approximately 53,200 commercial high-speed data and 25,500 commercial telephone customers. During the first quarter of 2013, commercial telephone customers increased by approximately 1,400 customers, and increased by approximately 5,900 over the trailing twelve months ended March 31, 2013, or 30.1 percent, Suddenlink said.
First quarter revenue was $539 million, up 6.4 percent compared to the first quarter of the prior year.
"Our results continue to be among the best in the industry, with pro forma, year-over-year revenue growth of 6.4 percent and EBITDA growth before non-recurring expenses of 9.4 percent," said Suddenlink chairman and CEO Jerry Kent. "Clearly, we're benefiting from the steps we've taken to build out our world-class infrastructure and national backbone, augmented by Project Imagine and our unrelenting focus on providing a superior level of customer care."
Also contributing to the financial results, the company said, were increases in advanced digital video and broadcast retransmission revenue, growth in revenues from our commercial business, including carrier services and growth in advertising revenue.
Video service revenues increased 2.3 percent due primarily to video rate increases, higher broadcast retransmission revenue and customer growth in the company’s digital and advanced video services, including converter rental revenue for high-definition and DVR capable digital converters.
Offsetting this growth, in part, were the year-over-year basic video customer losses, the impact of digital customers purchasing fewer digital tiers of service on average and decreased premium revenues, Suddenlink reported.
Capital expenditures for the three months ended March 31, 2013 were $98.2 million, compared to $97.5 million for the three months ended March 31, 2012.
The company revised previous guidance on capital expenditures, saying said it expects to spend more – approximately $340 million to $350 million total during 2013. The increase is associated mostly with the company’s replacement of a third-party telephone service provider with its own internal platform and resources, as well as from increased levels of customer premise equipment supporting an increased demand for our TiVo product.
The majority of the phone platform migration will take place in 2014; the company expects to complete the project by early 2015. The company said, “We expect to incur up to $50 million of additional non-recurring operating expenses and capital expenditures through early 2015 to complete this transaction, but also expect to significantly reduce telephone operating expenses when completed.”