The stock price is down more than 11% in pre-market trading and it’s easy to see why. The cable company reported a net loss of $16.4M, down from a $57.1M profit in the same period last year, on revenues of $1.52B, -7.5%. The Street thought that revenues would hit $1.64B. And analysts anticipated a 5 cent a share profit, not a 6 cent loss. This morning’s release is short on details but notes that Cablevision lost about 5,000 video customers, ending the quarter with 2.89M. Video revenues fell 4.2% to $767M. The number of broadband and phone customers each increased by 23,000 respectively to 2.79M and 2.29M. Revenues for data were +8.9% to $330M and phone was +2% to $209M. Cablevision says that Hurricane Sandy was largely to blame for the soft results. “In the second quarter we anticipate the positive impact of our recent pricing moves as well as an improved advertising outlook to lead to sequential improvement in our” adjusted operating cash flow, CEO James Dolan says.
The stock is down as investors discount the one-time $200M benefit to earnings, mostly from Dish Network’s payment to settle the breach-of-contract case involving the now-defunct VOOM collection of HD channels. That contributed to Cablevision’s net income of $116.6M in Q4, up 27.4% vs the end of 2011, on revenues of $1.66B, -1.6%. The top line figure is a little short of the Street’s expectation for $1.7B. Analysts likely are now computing how much earnings per share would have been without the one-time Dish payment; with it, Cablevision reports earnings at 45 cents a share, ahead of forecasts for 9 cents. The Long Island-based cable company says that Hurricane Sandy knocked out about 10,000 video, 9,000 broadband, and 7,000 phone customers. All told, Cablevision ended the year with 3.2M video subscribers (down 50,000), 3.1M broadband (down 5,000) and 2.4M phone (down 10,000). But ad sales were up 17.6%. “The enormous challenges of Superstorm Sandy had a strong negative impact on our fourth quarter results,” CEO James Dolan says. “Ever resilient, our employees met those challenges, restored our system and now are focused on continuing to enhance our product portfolio to meet our customers’ evolving needs and expectations.”
The results aren’t thrilling, but they aren’t bad either considering the challenges that the Long Island-based cable operator faces — and the Street’s expectations. Cablevision reported net income of $63.8M, -27.6% vs last year’s Q2, on revenues of $1.7B, +5.1%. The revenue number is on target with the consensus forecast. But earnings per share for continuing operations, at 24 cents, tops predictions of 19 cents. Many investors have wondered about Cablevision’s growth prospects as Verizon and AT&T heavily promote their video, Internet and phone services in the New York tri-state area. So it’s a surprise to see that Cablevision didn’t lose video subscriptions in Q2; they held steady at 3.3M vs the end of March. Meanwhile the number of high speed data customers was up 25,000 to 3.0M, while phone users grew 23,000 to 2.4M. The company doesn’t break out numbers for its Clearview Cinemas unit but said that lower revenue there was “more than offset by lower corporate costs”. The company said in May that it plans to sell the local chain, which includes Manhattan’s famed Ziegfield Theater. “We are continuing to invest in our operations to ensure that we are offering the best products and service to our customers”, CEO Jim Dolan said. “Our focus on transforming the way we operate has never been stronger”.
Cablevision CEO Jim Dolan likely will be on the hot seat today as investors look for clues about his priorities after the recent departure of COO Tom Rutledge, now CEO of Charter. But Dolan at least won’t have to apologize for his company’s Q4 results. It ended the year with net earings of $60.5M, down 46.9% — although last year included $40.2M from AMC Networks, which was spun off — on revenues of $1.69B, up 7.3%. The revenue figure is slightly ahead of the $1.68B that analysts expected. Earnings at 22 cents a share are a penny shy of the 23 cents the Street forecast. The cable company’s video unit lost 14,000 customers in the quarter, ending the year with 3.25M, which is better than some analysts forecast. But, like most cable operators, Cablevision more than compensated with a 31,000 increase in broadband customers, to nearly 3M, and 31,000 phone subscribers, to 2.36M. “We remain confident in the strength of our underlying business and in our ability to deliver industry-leading products,” Dolan says. “Looking ahead, we will continue to improve on those offerings while we remain focused on enhancing shareholder returns and building the company for the long term.” Cablevision shares are down 57.8% over the last 12 months as the Street questions its ability to keep growing while Verizon’s FiOS and AT&T’s U-verse become more robust competitors.
UPDATE, 8:05 AM: The stock is down more than 13% in early trading, with the decline accelerating after the company’s conference call with analysts. CEO Jim Dolan acknowledged that “not all of our results in the quarter are where we want” — which he says is due in part to the decline in housing growth. But COO Tom Rutledge also said that programming is “the single biggest cost item that we have,” and the company is grappling with new retransmission consent payments to TV stations. “We’re absorbing the collapse of the broadcast industry business model,” he says. For now, the company is waiting to see whether the FCC will do something to help tame those rising costs. It’s also promoting a higher-priced video-phone-broadband package that features faster-than-average Internet speeds.
Cablevision shares are down 8.7% in early trading after the company reported anemic 2Q results. Net income at $87.8M was up 44.3% vs the same period last year on revenues of $1.69B, up 9.1%. But if you factor out the company’s recent acquisition of Bresnan Communications, the 2Q growth for cable TV — which accounts for 89% of Cablevision’s total revenues — would have been just 1.3% vs last year, not 9.8%. Further complicating comparisons is Cablevision’s recent spinoff of AMC Networks. (Cablevision accounts for income from AMC under ”discontinued operations,” not as a contributor to net revenues.) Still, analysts expected better: Earnings at 31 cents a share contrast with the 44 cents forecast. The Street also thought total revenues would come in higher at $1.87B. The subscription losses hurt: Cablevision said good-bye to 7% of its pay TV customers since March, ending 2Q with 3.28M. That likely will lead some analysts to wonder whether Cablevision has much room to grow. Its systems are concentrated in New York City suburbs and Long Island where Verizon and AT&T also are vigorously competing for TV subs. Even with broadband and phone subscriptions, Cablevision’s customer count fell 4.6% to 3.64M. Now that Cablevision has spun off AMC Networks it is “more focused than ever on the strength of our telecommunications business and on creating additional value for our customers and shareholders,” says CEO Jim Dolan.