Mixed Q1 For Cablevision

Basic Video Declines Offset By Strong Revenue, AOCF Growth
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Subscriber metrics continued to falter in the first quarter for Cablevision Systems, but the Bethpage, N.Y.-based cable operator managed to squeeze strong profits out of its remaining customers, turning in what one analyst called its best Q1 results in years.

Basic video subscribers declined by 14,000 in the period, behind analysts’ estimates of about 8,000 in losses. High speed Internet and phone additions of 8,000 each also fell short of consensus estimates of 15,000 and 9,000 respectively.

But despite continued subscriber weakness, Cablevision managed to grow overall revenue by a strong 4.3% and adjusted operating cash flow by 25%. On the cable side, revenue rose 4.5% and AOCF grew 17%, mainly due to rate increases and higher advertising revenue.

“Cablevision generated strong year-over-year financial results as well as solid growth in our high speed data and voice subscriber metrics,” CEO James Dolan said in a statement. “We continued to enhance the customer experience with industry leading products and our relentless focus on providing better service for our customers. We are pleased with our first quarter performance and look forward to building on this success.”

In a research note, MoffettNathanson principal and senior analyst Craig Moffett wrote that trends are improving for Cablevision – pricing is getting better, sub trends are stabilizing and capital expenditures are declining.

“That should give Cablevision some runway,” Moffett wrote, adding that the longer term question of competition with Verizon Communications’ FiOS (to which it has the greatest exposure of any MSO) remain.

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