By Saabira Chaudhuri
Cablevision Systems Corp.'s (CVC) second-quarter profit more
than doubled amid a profit from recently sold businesses, though
the company lost customers from the prior quarter driven by
declines in video.
Cablevision, which has the highest penetration of video,
broadband and voice services across its coverage area among cable
peers, leaves little room for expansion, according to Morgan
Stanley. The company also faces more intense competition from
telecom peers, and has been subject to speculation that it could be
a target for acquisition by Charter Communications Inc. (CHTR) or
Time Warner Cable Inc. (TWC)
The Bethpage, N.Y., company reported it lost 20,000 video
customers and 3,000 voice subscribers sequentially, while adding
1,000 high-speed data customers in the latest period.
From the year-earlier quarter, video customers were flat, but
Cablevision had added 25,000 high-speed data and 23,000 voice
customers.
Total customers reached 3.2 million, down 11,000 from the first
quarter. A year earlier, total customers were 3.6 million.
Overall, Cablevision reported a profit of $135.4 million, or 51
cents a share, compared with $63.5 million, or 24 cents a share, a
year earlier. The latest period's income from discontinued
operations was $107.5 million, compared with a loss of $13.5
million a year earlier. Per-share earnings from continuing
operations were 11 cents from 29 cents. Revenue edged up 0.8% to
$1.57 billion.
Analysts polled by Thomson Reuters were looking for a per-share
profit of four cents on $1.58 billion in revenue.
The operating margin narrowed to 12.6% from 17.2%.
Earlier this year Charter Communications Inc. (CHTR) agreed to
buy Cablevision's western cable systems, known as "Optimum West,"
for $1.625 billion in cash. Then in April, Bow Tie Cinemas agreed
to buy all of the Clearview Cinemas theaters from Cablevision.
Cablevision has been involved in a protracted dispute with a
group of hundreds of newly unionized workers on a new contract, a
fight that has drawn attention from mayoral candidates, a complaint
from the National Labor Relations Board.
Shares closed Thursday at $18.64 and were inactive premarket.
The stock has risen 24% in the past three months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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