Cablevision Stock Rises 5% on Strong Q4Dolan Sees Wi-Fi Driving Future Growth 2/26/2014 1:12 PM Eastern
Cablevision stock was up 5% in early trading Wednesday after reporting better than expected fourth quarter results.
Cablevision shares were up as much as 8% ($1.33each) in early trading Wednesday to $17.95 per share, before settling back to $17.45 per share, up 5% (83 cents) by the afternoon.
Cablevision seemed to surprise investors by only losing 18,000 basic video customers in the period – analysts had expected them to shed 29,000 video customers – and reporting a modest increase in high-speed data customers of about 6,000, ahead of the loss of 3,200 HSD customers most expected.
On a conference call with analysts, Cablevision said that part of the reason for the better than expected results was its program to stand its ground with customers who ask for extensions to promotional offers as they near that promo’s expiration date.
“We started in August with getting really strict about not extending the perpetual promotions,” Optimum Services president Kristin Dolan said on the call. “A significant majority of those customers are still with us five and six months after they call for an extension.”
While Cablevision continues to be part of the consolidation guessing game that has intensified in the wake of Comcast’s pending acquisition of Time Warner Cable, the company declined any comment on M&A speculation.
But Dolan did say that he believes that Cablevision’s Wi-Fi superiority could be a big driver of future growth. The company has about 100,000 Wi-Fi access points in its territory currently and with the roll out of in-home Wi-Fi smart routers, that number should grow to about 1 million access points by the end of the year.
“We think connectivity is really the most important product to our customers versus what historically has been the video product,” Dolan said. “As we see that continue to evolve, there will be growth opportunity inside of that. The company’s Wi-Fi strategy is significant and sets us apart from the competition.”
Dolan added that at this year’s Consumer Electronics Show, “wearable” devices like Google Glass and Smart watches were all the rage, all which require a greater level of connectivity for consumers. “By being the best connectivity provider both inside the home and outside the home, that’s where the growth opportunity is going to lie,” Dolan said.
However, he said it is too early to determine if Cablevision will try to monetize that connectivity beyond its current use as a retention tool for existing cable and broadband customers.
“I think it’s early with that,” Dolan said. “We’re going to continue to strengthen that portion of our service offering. How we monetize it, I think we have a lot of different choices, we will try to be customer-sensitive to that, and try and provide packages that service all different segments of the marketplace.”