With top customers in trouble, C-Cor.net loses money

Cable TV equipment vendor C-Cor.net, facing business losses from two of its largest customers, Adelphia Communications and Charter Communications, reported a wider fiscal first-quarter loss than a year ago and said it expects to post another loss in the second quarter.

C-Cor.net posted a net loss of $7.3 million, or 20 cents a share, compared with last year’s first-quarter loss of $5.4 million, or 17 cents a share, on quarterly revenue that fell to $44.6 million from $52 million a year before. The company said it expects second-quarter sales between $57 million and $63 million, resulting in a net loss of 12 to 17 cents a share.

Most cable vendors are being hammered by MSOs’ weak capital expense spending budgets as operators finish rebuilding networks and move to adding revenues through additional customer features that are generally driven by software additions or through new in-home equipment. C-Cor’s woes are exacerbated by the financial woes facing Charter as well as Adelphia, which declared Chapter 11 bankruptcy in the first half of this year.

“Our two top customers have gone from being major customers to not spending much capital at all today,” said Dave Woodle, C-Cor.net’s chairman-CEO.

Woodle said he expected that “Adelphia will come back and have spending next year, and there is still work to be done in the Charter properties,” so the outlook is not completely bleak.

“It’s the same old story for the past year or so,” Woodle said. “We’re addressing it proactively and reactively.”

Proactively, the company is consolidating its base by adding pieces, such as its acquisition of Philips Broadband Networks and its extensive overseas customer base.

“We have started that integration very aggressively,” he said.

On the other hand, he said, “We’ve had to react to spending changes by our customers.”