Ntl reaches 'first profit'

According to The Times (p51, compact edition) and BBC Online, NTL has made its first quarterly operating profit in 10 years of trading:

http://news.bbc.co.uk/1/hi/business/3686383.stm

Chief Executive Simon Duffy attributed the results to growth in the consumer business (the bit we use!), which was in turn "mostly driven by the improvement in the operating performance of the company, which has, for the past four or five quarters, been continuing to take out costs and accellerate the rate of growth." (Times)

So, discuss especially if you are one of the unfortunate 'costs' that has been 'taken out' of the business lately...

[altis]

The Reg too..
http://www.theregister.co.uk/2004/05...ble_broadband/

[Charlie_Bubble]

Erm: "As a result, Q1 revenues increased by 7 per cent to £585m from £546.5m last year. And for the first time in the company's history, NTL achieved break-even operating income of £2.2m, compared to a £54.1m operating loss in Q1 2003. Net loss fell by 62.6 per cent to £65.4m compared with a net loss of £174.7m for the same period in 2003"

So, in actual fact they made a smaller loss than the same period last year, not a profit.

Revenue = company earnings before costs and expenses.
Operating income = income before interest payments and income taxes.

Originally Posted by Charlie_Bubble

Erm: "As a result, Q1 revenues increased by 7 per cent to £585m from £546.5m last year. And for the first time in the company's history, NTL achieved break-even operating income of £2.2m, compared to a £54.1m operating loss in Q1 2003. Net loss fell by 62.6 per cent to £65.4m compared with a net loss of £174.7m for the same period in 2003"

So, in actual fact they made a smaller loss than the same period last year, not a profit.

Revenue = company earnings before costs and expenses.
Operating income = income before interest payments and income taxes.

I am well aware of the difference, and also the difference between an overall net profit and an operating profit. (I work in the Corporate Affairs dept of a large plc and have just come out of an Annual Report planning meeting)

They made more money selling their services than they spent providing them. Hence, they made an operating profit, which is what I said in my first post. Overall they made a loss, although a smaller one than previously, and I think we're aware of the long-term problems that are responsible for that.

Nevertheless the fact that the core consumer business has proven, for the first time in 10 years, that it is capable of operating profitably, is extremely significant as it demonstrates that cable-delivered consumer communications services really are a viable business. In that respect I think the Times article, which chose to headline on the operating profit, is more accurate than the BBC online article, which chose to lead off on the overall fall in net loss.

[Charlie_Bubble]

I was merely pointing out that your main thread title was misleading. It may make people think that NTL is making money, when it is actually losing it still due to their heavy debt burden.

[downquark1]

At this rate how long until the debt is paid off and/or we can expect a new feature?

Hence the judicious use of 'quote marks'

Originally Posted by towny

I am well aware of the difference, and also the difference between an overall net profit and an operating profit. (I work in the Corporate Affairs dept of a large plc and have just come out of an Annual Report planning meeting)

They made more money selling their services than they spent providing them. Hence, they made an operating profit, which is what I said in my first post. Overall they made a loss, although a smaller one than previously, and I think we're aware of the long-term problems that are responsible for that.

Nevertheless the fact that the core consumer business has proven, for the first time in 10 years, that it is capable of operating profitably, is extremely significant as it demonstrates that cable-delivered consumer communications services really are a viable business. In that respect I think the Times article, which chose to headline on the operating profit, is more accurate than the BBC online article, which chose to lead off on the overall fall in net loss.

just proves that corporate affairs just waffle a lot and make a bad thing look good. The average Joe on the street sees operating profit as PROFIT when infact the company made a loss but corporate affairs put a spin on it.

[Florence]

First quarter profit what will it look like when customers pay next months bill I will be paying them £13 less others have moved away from Cable completely. Some have taken free bribes to stay. All can spoil the effects of one quarters profit and soon turn thing back into a loss.

Originally Posted by gary_580

just proves that corporate affairs just waffle a lot and make a bad thing look good. The average Joe on the street sees operating profit as PROFIT when infact the company made a loss but corporate affairs put a spin on it.

Actually there's a lot more to it than that. Investor relations managers can't just go round talking the company up indiscriminately. If they talk it up too much, then the share price can be unduly influenced upwards. That might look good in the short term, but if the price is artificially high, then it won't take long for analysts to spot it and when the correction comes, the price can end up worse off than where it started. Apart from that, there are financial regulators who rule strictly on how you are allowed to put things when making announcements of this type, so these announcements are not all just spin. (They are not for the average Joe on the street either, as it happens; quarterly trading statements are really aimed at the City and major institutional investors). And of course, senior executives who can make more out of share deals than they do with their wage packet stand to lose out big time if the share price fails to perform in the long term.

In this case, I think it is right to draw attention to the fact that this quarter, the company has made its first ever operating profit. This is highly significant because it is the first time it has ever been proven that ntl's consumer service is even capable of being profitable. This piece of information is of far greater significance to the long-term performance of the company and its share price than is the fact that it is still making a net loss. Everyone knows ntl is making a net loss, and they know why. They also know that, provided the company is more careful in future than it has been in the past, this will not be the situation forever. Having said that, Kits has a point. It will be interesting when the company produces its Interim report in three months to see whether the higher pricing and bribery by the retentions department have plunged ntl back into operating loss or if there is a genuine upward trend in business.