Cablevision Profit Beats Estimates as Internet Subscribers Rise (BLOG)

Cablevision Systems Corp., the New York-area cable TV operator, reported second-quarter profit that topped analyst estimates as it added m...

Cablevision Systems Corp., the New York-area cable TV operator, reported second-quarter profit that topped analyst estimates as it added more phone and broadband subscribers.
Net income fell to $63.5 million, or 24 cents a share, from $87.8 million, or 32 cents, a year earlier, when spun-off AMC Networks Inc. contributed to earnings. Analysts had estimated 19 cents on average, according to data compiled by Bloomberg.
Cablevision, which serves about 3 million customers around New York City and Long Island, benefits from vacationers turning on its service in regions such as the Hamptons from June to September, boosting subscriber figures in the second and third quarters, said Vijay Jayant, an analyst at ISI Group in New York. The Bethpage, New York-based company was also able to take advantage of less aggressive promotions from Verizon Communications Inc. (VZ)’s FiOS in the quarter, he said.
“The competitive intensity is declining,” Jayant said in an interview. “It’s also seasonally stronger for Cablevision compared with other pay-TV operators because of the Hamptons effect.”
Cablevision fell 0.2 percent to $15.80 at 9:53 a.m. in New York. The stock had risen 11 percent this year through yesterday.

Market Valuations

Sales (CVC) were $1.7 billion, in line with analysts’ estimates. Average revenue per user rose 1.7 percent to $155.12.
AMC contributed $18.6 million, or 6 cents per share, to earnings last year. Excluding AMC, profit fell 8.3 percent.
Recent cable acquisitions, including Cogeco Cable Inc. (CCA)’s $1.36 billion deal for Atlantic Broadband Inc. and Suddenlink Communications’ $6.6 buyout by BC Partners, CPP Investment Board and Chief Executive Officer Jerry Kent, have suggested that market valuations for public cable companies such as Cablevision are too low, Jason Armstrong, an analyst at Goldman Sachs & Co., said in an interview before the earnings.
Cablevision added 25,000 Internet customers and 23,000 voice subscribers in the quarter. The cable provider’s TV customers were unchanged, better than the 10,000 quarterly loss estimated by 12 analysts surveyed by Bloomberg.
Verizon announced on July 19 it was lowering its forecast for FiOS net additions and said it would raise prices in the second half of the year. Verizon FiOS overlaps with Cablevision in about 40 percent of its footprint.