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Mediacom Turns Second-Quarter Profit

Aug 5, 2004  •  Post A Comment

Cable operator Mediacom Communications reported Tuesday that it swung to a second-quarter profit, with the company’s high-speed data and advertising businesses offsetting a decline in subscribers due to seasonal factors as well as fierce competition from satellite operators expanding their local-into-local service.

The company also said it is pushing back to next year its rollout of voice-over-Internet protocol telephony service, blaming the delay on troubles with telecommunications companies that the company will use to help deliver the service to customers.

The Middletown, N.Y.-based operator, which has nearly 1.5 million subscribers, reported a second-quarter profit of $30.1 million, or 25 cents a share, compared with a year-earlier loss of $38.2 million, or 32 cents a share. Revenue rose 6 percent to $267.6 million.

Mediacom said it lost 42,000 subscribers as a result of seasonal factors, which are common to cable operators in the second quarter as college students go home for the summer, as well as the gains that satellite operators have made once they offer local TV channels to customers. Indeed, Mediacom said 89 percent of its subscriber footprint now faces competition from a satellite company that offers local channels — up from 62 percent at the end of 2003.

That helped explain why video revenue rose just 1.3 percent in the quarter, driven largely by basic rate increases.

However, high-speed data revenue surged 40 percent in the quarter, and advertising revenue advanced 16 percent, as Mediacom brought in-house the advertising activities of certain markets that were previously managed by third parties, and to a lesser extent increased local advertising sales.

Meanwhile, Mediacom executives blamed the VoIP delay on troubles with third-party vendors, which have been forced to change plans as a result of woes in the telecom sector.