Continental shift creates $94 mil 2nd qtr. loss
NEW YORK — US West Media Group reported a 16% increase in operating cash flow in the second quarter, but depreciation and amortization costs associated with its November 1996 acquisition of Continental Cablevision resulted in a $94 million net loss for the quarter.
This compares with a $119 million net loss in the 1996 quarter.
Operating cash flow (earnings before interest, taxes, depreciation and amortization) was $657 million in the latest quarter, compared with $566 million in the year-ago period. Revenues gained 15% to $2.3 billion from $2 billion. All 1996 numbers have been adjusted as if US West Media owned Continental for the entire year.
During the quarter, US West renamed its domestic cable systems MediaOne to reflect its strategy of using a single network to deliver new broadband services. MediaOne ended the period with nearly 5.1 million subscribers, up 3% from the 1996 quarter.
Domestic cable gains
Revenue from the company’s domestic cable operations, including its investment in Time Warner Entertainment, increased 7% to nearly $1.3 billion. Operating cash flow from domestic cable grew 6% to $402 million.
During a conference call with reporters, US West execs declined to speculate on the possibility of US West Media and Time Warner swapping cable assets, but allowed that there are “ways to leverage the scale and clusters that we both have in our business.”
The company also refused to comment on the prospect of an investment in MediaOne by Microsoft.
So far this year, US West Media has sold more than $625 million in non-strategic assets, including a wireless interest in France and a publishing operation in the U.K. The company expects to reach its goal of generating $1 billion from the sale of non-strategic assets by year-end.
“Streamlining our business sharpens our focus in many ways, including providing additional cash to fund our network upgrades,” said Chuck Lillis, US West Media president and chief executive officer. “These upgrades are enabling us to go beyond cable TV to offer multichannel video, high-speed data and telephone services.”