UPDATE 3-Cablevision adds subscribers, exploring options
(Adds CEO comment, analyst reaction, byline; updates shares)
NEW YORK, July 31 (Reuters) - Cablevision Systems Corp (CVC.N) added more subscribers than expected in the second quarter and comments from its CEO suggested that the Dolan family may try to take the cable company private again, sending its shares up more than 11 percent.
Cablevision Chief Executive Jim Dolan said on an earnings conference call that the company is exploring options to close the gap between its operating performance and its current market value.
"We are considering and actively exploring alternatives that may close this gap and want to assure investors that we will listen to their thoughts," Dolan said.
Analysts said Cablevision's options could also include spinning off its cable network unit Rainbow Networks, a special dividend, or aggressive share buybacks.
The Dolan family offered to take Cablevision private last October for $36.26 a share, but the deal was rejected by shareholders who deemed the price too low. Since then, the stock had fallen more than 30 percent before Thursday's jump.
Some analysts believe Cablevision's shares have suffered partly because of what has been dubbed the 'Dolan Discount,' due to unexpected management decisions such as the company's purchase of the Long Island newspaper Newsday for $650 million in May.
"The Dolan Discount is more than offset by the company's willingness to restructure," said Tom Eagan, an analyst at Collins Stewart, who rates the stock a "buy."
FIERCE COMPETITION
The New York-based cable operator fended off fierce competition from Verizon Communications' (VZ.N) FiOS TV to add 7,000 basic video subscribers during the quarter, outperforming forecasts by analysts who had expected it would lose 5,000 subscribers, according to a poll of seven analysts by Reuters.
Cablevision added 120,000 digital video subscribers and 52,000 high-speed Internet subscribers. The analysts expected Cablevision would add just 32,500 digital subscribers and 48,000 Internet subscribers.
Cablevision also added 81,000 digital phone subscribers during the quarter, while analysts expected it to add 76,000.
"We were positively surprised, especially with the additions of 7,000 basic video subscribers, and the rest of the business was pretty strong, too," said Standard & Poor's analyst Tuna Amobi.
Second-quarter net profit fell to $98.3 million, or 33 cents a share, from $317.4 million, or $1.08 a share from the year-ago period, when it posted a one-time gain from the sale of a regional sports network.
Income from continuing operations was 34 cents a share, down from 43 cents a share a year ago. Continued...
