Cablevision shows profit as phone, net subs rise

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Cablevision swung to a first-quarter profit Thursday as the company added more digital-phone and Internet subscribers despite increased competition from Verizon.

The Long Island-based company, which also owns Madison Square Garden and the New York Knicks and New York Rangers professional sports franchises, reported a profit of $20.2 million, or 7 cents a share, reversing a year-earlier loss of $31.6 million, or 11 cents a share.

Revenue rose 11% from the year-ago period to $1.9 billion.

During a conference call with media and analysts, chairman James Dolan said the Cablevision board has authorized management to explore a spinoff of the MSG business. No details were provided.

Cablevision's core operations saw revenue increase 5% to $1.33 billion amid subscriber acquisitions. During the quarter, the operator added 9,400 digital-video subs, up 7% versus the year-ago period. Digital-phone customers rose by 244,500, or 14%, and broadband subs grew by 6% as Cablevision picked up 141,700 new high-speed Internet customers.

Despite a discouraging advertising market, the company's Rainbow Media unit posted impressive gains in the quarter. The programming arm, which includes AMC, WEtv, IFC and Sundance Channel, upped revenue by 11% to $249.3 million thanks to a 9% increase in affiliate revenue and an 8% increase in ad sales.

Rainbow chief Josh Sapan said the ad sales increases largely were driven by volume increases at AMC, which is reaping the benefits of high-profile original series "Mad Men" and "Breaking Bad."

AMC increased its penetration by 2% since last year, closing March with 86.5 million subscribers. Adding 4,800 households, WE increased its penetration by 8%, reaching 61.7 million subs.

Shares of Cablevision closed Thursday at $19.15, up 4.4%.

Anthony Crupi is senior editor at Mediaweek.
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