Cablevision Reports Loss of 23,000 Video Subs in Second Quarter
UPDATED: The cable operator, controlled by the Dolan family, lost more subscribers than Wall Street had projected, and its stock hit a 52-week low, but it posted quarterly earnings and revenue that improved over the year-ago period.
NEW YORK - Shares of Cablevision Systems fell 12.8 percent on Tuesday after the cable operator reported the loss of 23,000 video subscribers in the second quarter amid a weak economy and a competitive market. The company also posted earnings and revenue that grew over the year-ago period, but fell short of Wall Street expectations.
The company, controlled by the Dolan family, recorded a quarterly profit of $88.1 million, compared with $61.1 million in the year-ago period. Revenue rose 9.1 percent to $1.69 billion.
Wall Street expectations had been higher for both metrics, but the company said quarterly results excluded as discontinued operations financials from recently spun off cable networks company AMC Networks, which will report its latest financials later this week. Analysts had in many cases made financial forecasts that included the AMC results for the latest period.
Cablevision added only some broadband and telephony customers, while losing more video customers than the average of 3,300 that analysts had projected to end the quarter with 3.28 million video users. Total customers, or homes receiving at least one of the company's services, declined by 17,000 to 3.64 million, the firm said.
On a conference call, management cited the challenging economy, the still-weak housing market and a competitive pay TV industry for the weak subscriber momentum, but said the company remains optimistic about the longer-term outlook for the pay TV business and economy.
Asked about lower VOD and pay-per-view results at other pay TV firms, company executives said they have seen slight weakness in that area as well.
Cablevision shares hit a 52-week low of $16.02 before closing at $17.02.
"With the successful completion of the AMC Networks spin-off, Cablevision's consolidated results are now primarily driven by our telecommunications operations," said president and CEO James Dolan. "Moving forward, as we roll out new innovations like our iPad app and DVR Plus, Cablevision is more focused than ever on the strength of our telecommunications business and on creating additional value for our customers and shareholders."
For example, Cablevision said Tuesday that it has launched apps for the iPhone and iPod touch that allow consumers to use their full cable TV service via those devices. It previously launched an iPad app for the same purpose. COO Tom Rutledge said the new apps will make the company's pay TV service more competitive.
Rutledge also reiterated plans to start making content available via those mobile devices outside of the home. Cablevision has started acquiring the necessary rights from some content companies and will launch an out-of-home offer "in the relatively near future," he said.