Cablevision Cropped By Competition

The pain continues for cable companies as Cablevision (CVC Quote - Cramer on CVC - Stock Picks) posted a steep third quarter loss as competitors turned up the pressure.

The Bethpage, N.Y. cable shop posted a net loss of $79.3 million or 27 cents a share. Those numbers compare with a loss of $59 million or 22 cents in the year-ago period. Analysts had been looking for a nickel loss, according to Yahoo Finance.

Sales for the third quarter ended in September were $1.51 billion, up from $1.38 billion last year. The top-line performance was below Wall Street's target of $1.54 billion.

A big area of concern among cable investors is the growing rate of customer losses as competing triple-play packages - TV, Net, calling services -- from phone companies lure users away.

Cablevision saw both a sequential and year-over-year increase in monthly subscriber defections. This so called churn rate jumped in basic video to 2.2% from 2% in the second quarter, digital video churn rose to 2.5% from 2.2% and Internet service customers fled at a 2.7% rate compared with 2.3% in the prior quarter.

Seen from another angle, new revenue generating units, a measure of how many different services Cablevision is selling its customers, grew at a tepid 1.7% over the second quarter level and 10% above the year-ago tally.

Looking ahead, Cablevision reaffirmed its target for 11% full-year sales growth, but cut its revenue generating unit additions to 800,000 from a prior goal of as much as 900,000 RGUs.

The news comes a day after Time Warner Cable (TWC Quote - Cramer on TWC - Stock Picks) reported surprisingly high customer losses in areas where competitors have rolled out services.

Strong promotion of high-definition programming by satellite broadcasters DirecTV (DTV Quote - Cramer on DTV - Stock Picks) and EchoStar (DISH Quote - Cramer on DISH - Stock Picks) along with the entry of phone companies like AT&T (T Quote - Cramer on T - Stock Picks) and Verizon (VZ Quote - Cramer on VZ - Stock Picks) in the video market has helped lure customers away from cable players like Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks) and Time Warner Cable.

Cablevision shares fell 70 cents to $25.81 in early trading Thursday.