Cablevision sheds customers as it cracks down on ‘fair weather customers’
Despite losing video and Internet customers, company reports increase in revenue and profits
Bethpage, N.Y., November 8, 2013 – Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the third quarter ended September 30, 2013.
Third quarter consolidated net revenues increased 1.8% to $1.568 billion, consolidated adjusted operating cash flow (“AOCF”)2 decreased 4.0% to $441.1million and consolidated operating income increased 3.6% to $225.4 million, all compared with the prior year period.
Operating highlights for the third quarter 2013 include:
- Average Monthly Revenue per Video Customer (“RPS”) of $164.61, an increase of $8.38 or 5.4%, compared with the prior year period.
- Cable advertising revenue growth of 8.8%, compared to the prior year period.
- Year to date Consolidated Free Cash Flow from Continuing Operations2 of $77.3 million.
Cablevision President and CEO James L. Dolan said, “Cablevision continues to enhance the overall Optimum experience for our customers with improved products and a superior level of service. At the same time, we have taken a number of steps to improve our financial performance and strengthen our balance sheet. We expect that the investments we are making in the business will yield results as we move forward.”
Telecommunications Services – Cable Television and Lightpath
Telecommunications Services includes Cable Television – Cablevision’s video, high-speed data, and voice residential and commercial services offered over its cable infrastructure – and Lightpath, a provider of integrated business communications solutions for larger companies.
Telecommunications Services net revenues for the third quarter 2013 increased 1.8% to $1.486 billion, AOCF decreased 4.5% to $486.2 million and operating income decreased 5.7% to $272.5 million, all compared with the prior year period. Third quarter 2012 results included a $12.0 million favorable settlement with a voice carrier. If excluded, consolidated net revenues would have increased 2.7%, AOCF would have decreased 2.2% and operating income would have decreased 1.6%, all compared to the prior year period.
Cable Television third quarter 2013 net revenues increased 1.8% to $1.407 billion principally due to higher data rates, higher video revenues and increased advertising revenues, compared to the prior year period. AOCF decreased 5.4% to $447.7 million and operating income decreased 7.2% to $255.8 million, all compared with the prior year period. Third quarter 2013 AOCF results reflect higher operating expenses, primarily programming and other costs. Excluding the favorable settlement with a voice carrier mentioned above, consolidated net revenues would have increased 2.7%, AOCF would have decreased 2.9% and operating income would have decreased 3.1%, all compared to the prior year period.
The following table illustrates the change in the Cable Television customer base during the third quarter of 2013:
Other primarily consists of Newsday, News 12 Networks, MSG Varsity, Cablevision Media Sales Corporation and certain other businesses and unallocated corporate costs.
Third quarter 2013 net revenues increased 2.0% to $87.6 million, AOCF deficit decreased by 9.2% to a deficit of $45.1 million and operating loss decreased 33.9% to a loss of $47.0 million, all compared with the prior year period. Third quarter AOCF results principally reflect lower operating costs as a result of reduced activity at MSG Varsity. The improvement in operating loss reflects lower depreciation expense, primarily due to a $13.2 million adjustment related to prior periods.
On November 6, 2013, the Board of Directors of Cablevision declared a quarterly dividend of $0.15 per share on each outstanding share of both its Cablevision NY Group Class A Stock and its Cablevision NY Group Class B Stock. This quarterly dividend is payable on December 13, 2013 to shareholders of record at the close of business on November 22, 2013.
There were no repurchases of stock during the third quarter of 2013. As of September 30, 2013, the Company had approximately $455 million available under its stock repurchase authorizations.