Cable Operators

Analyst Eyes Strong 1Q For Cablevision

5/05/2006 8:00 PM Eastern

UBS cable debt and equity analyst Aryeh Bourkoff is anticipating that the momentum generated by strong first-quarter metrics generated by Comcast Corp. and Time Warner Inc. to continue next week, when Cablevision Systems Corp. is expected to release its first-quarter results.

In a research report, Bourkoff wrote that he expects revenue to grow 9.9% to $1.3 billion and cash flow to rise 16.3% to $411 million. He also anticipates a modest decline in basic-subscriber additions to 16,700 in the first quarter (versus 17,900 additions in the fourth quarter and 21,800 additions in the first quarter of 2005) and in digital customer adds (94,400 compared to 119,400 in the fourth quarter and 139,900 last year). High-speed Internet additions should also decline slightly to 82,400 (versus 93,900 in the fourth quarter and 88,000 last year) and telephony additions should dip to 119,600, compared to 130,100 in the fourth quarter and 91,800 last year. Bourkoff’s reasoning for the slight declines is Cablevision’s leading penetration in the segments — it has about 67.6% digital penetration, 38% high-speed Internet penetration and 28% penetration for digital phone — all tops in the industry.

“We project continued growth across all product categories fueled by bundled offerings, and further underscored by overall improving momentum industry-wide,” Bourkoff wrote.

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