Voom Kickoff Leads To Cablevision Q4 Oper. Loss
By Jeff Malester -- TWICE, 3/22/2004
BETHPAGE, N.Y. — Costs associated with the launch of Voom, a direct broadcast satellite service oriented to high-definition television viewing, were the primary reason parent Cablevision Systems posted a consolidated operating loss of $46.2 million in the fourth quarter, compared with operating income of $70.6 million in the year-ago period.
Costs for starting Voom were also a key reason for a 19 percent drop in adjusted operating cash flow at Cablevision in the fourth quarter, down to $249.9 million from $310.1 million year-on-year.
In the fourth quarter, Cablevision's satellite service division, Rainbow DBS, which includes Voom, reported an operating loss of $54.9 million, compared with an operating loss of $1.8 million in the same quarter in 2002. Much of this loss was attributed to costs associated with the Voom start-up — including marketing, administration, high-definition channel development and systems integration expenses. These costs were not offset by any fourth quarter Rainbow DBS division revenue.
Consolidated fourth quarter Cablevision revenue climbed 12 percent to $1.2 billion, from $1.1 billion in the same three months a year earlier. The company moved into the red in the three months, recording a net loss of $197.4 million, compared with net income of $529.8 million in the same quarter in 2002.
For the 12 months, consolidated revenue increased 10 percent, hitting $4.2 billion, up from $3.8 billion year-over-year; however, operating income dropped to $31.6 million, an 83 percent decrease from the $190 million posted in the prior-year period. A net loss for the 12 months came in at $297.3 million, compared with net income of $93.3 million in all of 2002.
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