Despite subscriber gains, Cablevision's Q2 profit dips
Despite increases in its triple-play subscribers, Cablevision saw its second-quarter profit drop due to expenses related to extinguishment of debt.
Cablevision, which competes against Verizon and satellite video operators in the New York metropolitan area, reported net income of $60.9 million, or 21 cents per share, for the quarter that ended June 30, compared with $87 million, or 30 cents per share, in the same timeframe a year ago.
Thomson Reuters analysts were expecting earnings of 40 cents per share on revenue of $1.77 billion.
Cablevision had a $110 million expense related to extinguishment of debt, and the company's Newsday division saw its revenue drop by 9.7 percent to $80.1 million due to lower ad revenue.
The nation's fifth-largest cable operator saw its revenue increase by 5.8 percent to $1.8 billion from $1.7 billion.
"For the second quarter, Cablevision delivered solid increases in revenue and AOCF (adjusted operating cash flow), driven primarily by the ongoing strength of our core businesses," Cablevision President and CEO James Dolan said. "Both cable and Rainbow performed well over the last three months, fueled in part by impressive double-digit increases in advertising revenue.
"In addition, our cable business continues to experience steady growth across all of our consumer services, including basic video, which helped maintain Cablevision's industry-leading penetration rates again this quarter. We are pleased with our 2010 year-to-date results, highlighted by free cash flow of $432 million."
The cable division's second-quarter 2010 net revenues increased 5.6 percent to $1.37 billion, while operating income increased 24 percent to $401.1 million, each compared with the prior year period.
Cablevision said the second-quarter increases in net revenues, AOCF and operating income were principally driven by the growth in digital video, high-speed data and voice customers, as well as higher rates.
Cablevision added 2,900 basic video customers from the previous quarter but lost 26,200 when compared with the same quarter a year ago. For digital video tiers, the company added 21,100 subscribers from March and 23,600 from a year ago.
Driven by customers subscribing to more offerings, Cablevision's average monthly revenue per video subscriber rose 6.8 percent to $149.12.
On the data side, Cablevision saw its subscribers grow by 27,000 from the previous quarter, with 134,500 additions since the same quarter last year.
Cablevision welcomed 24,900 new phone customers into the fold since March and 152,700, or 7.8 percent, additions from a year ago.
The company's revenue-generating units were up 75,900 from March and 284,500, or 2.7 percent, from June of last year.
For Cablevision's Optimum Lightpath division, revenues increased 18.1 percent to $70.8 million, while operating income increased 54 percent to $6.1 million, each compared with the prior-year period. Cablevision said the improved results were driven primarily by a 33.5 percent increase in revenue from Ethernet services, offset in part by a slight increase in operating expenses to support the increase in Ethernet installations.