Cablevision Systems reported Q3 revenues of $975.8 million, up 12% compared to the same period last year, and announced that it will restate its previously issued 2003 quarterly financial statements due to approximately $15 million of expenses that were improperly recorded in 2002 and earlier periods. Consolidated operating income totaled $24.2 million, up from $10.5 million in the comparable 2002 period due to the 12% increase in revenue and the incurrence of a $72.0 million restructuring charge in the prior year period compared to $8 million in the current period. Cablevision credited ongoing consumer demand for growth in its digital cable and high-speed data services. Some highlights from Q3:
- 711,600 Revenue Generating Units, up 5% and 26% from June 2003 and September 2002, respectively, including Optimum Voice customers, the company's new residential VoIP service
- 755,300 Interactive Optimum digital video customers, up 157,700 in the quarter, or an average of 12,100 per week, for a penetration rate of 25.6% compared to a penetration rate of 2.7% in September 2002
- 984,800 Optimum Online cable modem customers, up 63,700 in the quarter, or an average of 4,900 per week, for a penetration rate of 23.1% compared to 19.5% in September 2002. In the prior quarter, Cablevision added 68,000 new cable modem customers. Cablevision now has over one million cable modem customers and a penetration rate at more than 23%.
- a loss of 8,900 basic video customers in the quarter, almost entirely in New York City. 100% of homes passed in the company's New York City system will be capable of receiving digital video, high-speed data and voice services by the end of 2003, as compared to less than 50% of homes passed that were capable of receiving such services at the start of 2003.
- average consumer revenue per basic video customer of $73.45, a 15% increase compared to $63.71 in the year-earlier period
- a 9% increase in advertising revenue primarily due to strong local and regional advertising increases, offset by weakness in national advertising sales
- 2004 Outlook: Cablevision expects full year 2004 free cash flow will be modestly negative. However, the company anticipates it will achieve free cash flow for Q4 2004.
