Cable Technology Feature Article
Cablevision Earnings Report Indicates Bad 2012, Less than Positive 2013
By Oliver VanDervoort, Contributing Writer
2012 might go down as the year that cable television providers realized that they were going to have to change the way they do business. Some companies are catching on to that quicker than others, but all cable companies seem to be struggling a little bit more recently. Cablevision, one of the country’s biggest companies in this area, recently released their third quarter financial numbers and sported a surprising dip in total profits.
Cablevision displayed this surprise loss thanks in large part to the fact that they needed to extinguish a $61 million debt, but the company also had problems holding onto subscribers. The debt was the main reason for the company’s total loss, but they also saw a dip in the number of people who were signing up for their services or sticking around.
Another factor for the company was that Verizon’s (News - Alert) FiOS service is gaining steam as well as operating costs which have been skyrocketing. If the less than impressive numbers are bad news for Cablevision, it appears that the bad news is just going to continue.
“We expect fourth quarter 2012 capital expenditures to be significantly higher than during the comparable 2011 period,” Gregg Seibert, the company’s chief financial officer, said on an analyst conference call today after the results were released.
Those expenditures are certainly going to be increased thanks to Hurricane Sandy. During Hurricane Irene, Cablevision said it spent about $16 million last year. Most accounts say that the company can expect to spend about double that number for repair costs and regrouping after Sandy. A recent report indicated that the company still had around 500,000 customers without power as of the end of last week.
All of these numbers seem to be coming together to paint a less than rosy picture of 2012 and one that could be especially troubling for investors in 2013.
Edited by Brooke Neuman