Cablevision profit triples, shares rise
NEW YORK (Reuters) - Cablevision Systems Corp (CVC.N) posted a higher-than-expected profit on growth in Internet subscribers and advertising and cost-cutting, and said its Madison Square Garden spin-off should be completed by year-end.
Shares of the New York cable operator rose more than 2 percent after it said profit more than tripled to $98.9 million, or 33 cents a share. Last year it earned $30.9 million, or 11 cents per share.
Revenue grew 5.3 percent to $1.84 billion, also beating Wall Street estimates.
Analysts on average had been expecting profit of 26 cents a share on revenue of $1.82 billion, according to Thomson Reuters I/B/E/S.
Cablevision Chief Executive James Dolan said the company is "moving forward" with its planned spin-off of the Madison Square Garden business, and expects to get the deal done by the end of this year.
The Dolan family hopes to get a better valuation from Wall Street for assets that include the New York Knicks basketball team and Radio City Music Hall. Some analysts have valued MSG at between $1.5 billion to $2 billion as a stand-alone business plus debt.
Under the new structure, the Dolans would continue to hold a controlling stake in MSG, which also owns the namesake arena and New York Rangers hockey team. The company said that in the third quarter, MSG's revenue was $162 million, up 1 percent from the same period one year ago.
James Dolan will become executive chairman of the new public company and continue as CEO of Cablevision. Cablevision founder Charles Dolan will continue as Cablevision chairman.
LOST SUBSCRIBERS
Despite the solid overall results, Cablevision's report showed that it still faces a fierce battle for subscribers. Cablevision, which faces off against Verizon Communication's (VZ.N) FiOS TV digital service, lost 27,300 basic video subscribers, which was more than some analysts had expected.
"There is much value in these CVC cable systems due to their exhibited competitiveness and in (its) cable programing networks long-term due to increasing viewership and ad trends," said Miller Tabak & Co analyst David Joyce. "But there should continue to be somewhat of an overhang on the stock (on) competitive and macroeconomic concerns."
The company's digital customers were up 2.6 percent, compared with a year ago. Compared with the second quarter, it lost 14,300 digital subscribers.
The tough economy has hurt growth in our urban locations due to "higher unemployment and vacancy rates," the company said on a conference call with analysts. However, Cablevision said it saw signs of economic recovery.
"Advertising seems to be rebounding," said Chief Operating Officer Tom Rutledge. "We've begun to see a return on certain advertisers from the financial services and automotive sectors and our interactive advertising is becoming a more meaningful part of our business."
Cablevision said its average monthly revenue per subscriber rose to $141.03 from $139.69 in the second quarter and $133.11 one year ago. Continued...
