Basic Video Subs Flat at Cablevision

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Basic video subscribers were flat at 3.2 million in the second quarter at Cablevision Systems, but cash flow growth stumbled into negative territory, as the Bethpage, N.Y. MSO continues to struggle with its own success.
Revenue for the period was up 0.5% to $1.7 billion, but adjusted operating cash flow fell 7.2% to $532.4 million and operating income plunged 16.7% to $26.3 million.
The declines were slightly below analysts' consensus estimates which ranged from 1.1% revenue growth to a 5% decline in AOCF. Cablevision fared better on basic video subscribers, beating consensus estimates of a decline of 8,000 customers in the period.
But the MSO did manage to tally better than expected growth on the high-speed data and voice side - gaining 25,000 and 23,000 customers, respectively - ahead of consensus estimates of gains of 19,000 high-speed Internet and 22,000 voice customers.
Cablevision has been a victim of its own success over the past several quarters. As the industry leader in virtually every subscriber penetration metric, many analysts have wondered if the largely New York-centric MSO has any more room to grow. After the departure of several key executives - including former chief operating officer Tom Rutledge in December - CEO James Dolan has vowed to invest in products and operations. In a statement Tuesday, Dolan reiterated that commitment.
"We are continuing to invest in our operations to ensure that we are offering the best products and service to our customers," Dolan said in a statement. "The value proposition that Cablevision offers is growing as we further expand our WiFi network, enhance the Optimum Online experience and provide a growing list of both on-the-go and HDTV video offerings. These actions are generating a positive response as evidenced by the 24,000 net new customers we have added during the first half of 2012 and our very strong results in the recent FCC broadband measurement tests. Our focus on transforming the way we operate has never been stronger."