Cablevision profit explodes in 2nd quarter

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Cablevision Systems Corp. posted a huge year-over-year quarterly profit gain Wednesday thanks to the sale of a couple of regional sports cable channels but reduced its cable guidance, citing competition from players like Verizon Communications.

Nevertheless, the stock responded positively, gaining fractionally to $34, probably because executives didn't indicate — as some might have feared — that a $36.26-per-share takeout offer by the controlling shareholders the Dolan family has been withdrawn.

Shareholders are expected to vote on the deal to go private in the fall.

Cablevision earned $317.4 million in the second quarter, up from $14.6 million a year ago. Without the asset sales, the company earned 8 cents per share, besting Wall Street's estimate that the company would break even.

Cablevision, which also owns Clearview Cinemas, Madison Square Garden, the NBA's New York Knicks, the NHL's New York Rangers as well as Rainbow Media, said revenue was up 12% to $1.6 billion.

The company lost a few hundred basic video subscribers during the quarter but added 168,000 digital video and high-speed Internet subscribers. It also lowered its revenue growth projection for the year from the mid-teens to 11% and said that it probably would have no new basic video subscribers this year, as opposed to growing that business by up to 2% as previously forecasted.

Cablevision CEO James Dolan cited Madison Square Garden and Rainbow Media, among other assets, as performing especially well during the quarter.

Rainbow, which includes AMC, IFC, WE, Voom and other programming, posted revenue that increased 11.9% to $222.3 million and operating income of $9.7 million, compared with an operating loss last year of $8.5 million.
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