Cablevision Sees Year-End Spin of MSG

NEW YORK (TheStreet) -- Cablevision (CVC Quote) beat on profit despite a drop in basic TV customers and alarmingly weak sales of advanced services.

The Bethpage, N.Y.-based cable giant also says it expects to complete the previously announced spinoff of its MSG unit by Dec. 31.

The company told analysts on a conference call that the MSG business, which includes Madison Square Garden, the New York Knicks and Rangers along with Radio City Music Hall, has signed on Delta Airlines (DAL Quote) as the official airline of Madison Square Garden. Cablevision also said it has renewed its contract to hold the Big East Men's College Basketball Tournament through 2016.

Cablevision posted a profit of 33 cents a share, up from earnings of 9 cents in the year-ago period, and well above the 26 cents analysts were looking for, according to Yahoo! Finance.

Sales for the third quarter ended in September were $1.84 billion, up 5% from $1.75 billion a year ago and slightly above the $1.82 billion target analysts had set.

And while the financials seemed solid, Cablevision offered a more troubling picture of its core cable business. Basic and digital video subscriber numbers fell from second-quarter levels, suggesting stronger competition from TV efforts by phone companies like Verizon (VZ Quote) and continued pressure from satellite players like EchoStar (DISH Quote) and DirecTV (DTV Quote).

Helping partially offset the slide, Cablevision saw slight gains in Internet and phone service customers in the third quarter. But its revenue generating units, a measure of total services Cablevision has sold to subscribers, was up by 11,500 and roughly flat with second quarter performance, though it was up 3% from year-ago levels.