Cablevision Systems said last week that the probe into its accounting practices is wrapping up and should be completed by March 15, when the cable company files its 2003 annual report with the Securities and Exchange Commission. The company said the probe, which began a year ago, revealed a series of misstatements to its balance sheet and required Cablevision to restate several items from its 2001 and 2002 balance sheets.
The company also said it was on track to spin off its fledgling satellite business later this year, having already received approval from the Internal Revenue Service to treat the transaction as tax-free. The company plans to submit the appropriate filing by April and have the actual separation take place sometime afterward. When completed, the satellite business, along with cable channels AMC, IFC and WE: Women’s Entertainment, will be split from Cablevision, which will focus on cable systems, sports teams and entertainment venues.
Meanwhile, Bethpage, N.Y.-based Cablevision reported a fourth-quarter loss of $197.4 million, or 69 cents a share, from a profit of $529.8 million, or 36 cents a share, as strong performances at the company’s cable and Rainbow Media networks businesses failed to offset start-up costs linked to the launch of the company’s satellite television service Voom. Revenue rose 12 percent to $1.2 billion. For the year, Cablevision posted a net loss of $297.3 million, or 99 cents a share, compared with a year-earlier profit of $93.3 million, or $1.60 a share. Revenue rose 10 percent to $4.2 billion.
Martha Stewart Omnimedia Has Mixed Quarter
Martha Stewart Living Omnimedia reported mixed results last week as the lifestyle company swung to a fourth-quarter profit but saw its revenue decline. The company continued to labor under the dark cloud of its founder, who is on trial for obstruction of justice. The New York-based company reported a quarterly profit of $4.6 million, or 9 cents a share, compared with a loss of $2 million, or 4 cents a share, a year ago, when the company booked a $7.7 million restructuring charge. Revenue fell 9 percent to $70.9 million. For the year, the company posted a loss of $2.8 million, or 6 cents a share, vs. a year-earlier profit of $7.3 million, or 15 cents a share, on a 17 percent revenue decline to $245.8 million.
Among the business units, publishing and Internet/direct commerce were the hardest hit, while the television operations suffered declines as well, recording a 7 percent drop for the quarter and a 4 percent drop for the year as a result of lower license-fee revenue, higher production costs and increased marketing costs at the company’s nationally syndicated show.
Gemstar-TV Guide Reports Narrowed Losses
Gemstar-TV Guide international last week reported a narrowed fourth-quarter loss of $491.4 million, or $1.20 a share, from year-earlier red ink of $1.3 billion, or $3.19 a share, as the company continued to strike long-term deals with consumer electronics makers and cable companies. The most recent quarter’s results include a $416.5 million intangible assets impairment charge and $75 million charge related to shareholder litigation. The year-ago quarter included a $1.1 billion intangible-asset charge. Revenue fell 11 percent to $217.1 million. For the year, Gemstar posted a loss of $577.4 million, or $1.41 a share, from a loss of $6.4 billion, or $15.64 a share, a year ago. Revenue fell 12 percent to $878.7 million.
Granite Feels Effects of Q4 Ad Slowdown
Station group Granite Broadcasting reported a widened fourth-quarter loss of $15.2 million, or 80 cents a share, compared with red ink of $3.7 million a year ago, hurt by a slowdown in political advertising spending and a sharp drop in movie and fast-food advertising at the company’s WB stations. Revenue at the New York-based eight-station group fell 10.5 percent to $29.7 million. For the year, Granite reported a narrowed loss of $46.9 million, or $3.15 a share, compared with a year-earlier loss of $81.6 million, or $3.72 a share. Revenue tumbled 20 percent to $108.5 million.