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TheStreet Open House

Why Cablevision Systems (CVC) Is Down Today

NEW YORK (TheStreet) -- Cablevision Systems  (CVC) was falling 2.31% to $16.49 on Thursday after the announcement that Comcast  (CMCSA) would acquire Time Warner (TWC) in one of the biggest deals of the year.

The decline is likely in response to Comcast's $45 billion acquisition of Time Warner, a deal that combines the two largest cable companies in the U.S. The merger should cause increased competition for Cablevision, Verizon  (VZ) and other, smaller cable companies. In the New York City area, for example, Time Warner's presence provides access for Comcast, which could pose problems Cablevision in the market.

The stock had a volume of more than 6 million just before noon on Thursday, compared to its average of 3,512,690.

Must Read: Comcast's Deal for Time Warner Cable Is Good For America

TheStreet Ratings team rates CABLEVISION SYS CORP as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CABLEVISION SYS CORP (CVC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 7871.1% when compared to the same quarter one year prior, rising from -$3.79 million to $294.60 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 2.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CABLEVISION SYS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CABLEVISION SYS CORP reported lower earnings of $0.23 versus $0.84 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.23).
  • The gross profit margin for CABLEVISION SYS CORP is rather high; currently it is at 51.06%. Regardless of CVC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CVC's net profit margin of 18.79% compares favorably to the industry average.
  • Net operating cash flow has decreased to $303.72 million or 19.06% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CABLEVISION SYS CORP has marginally lower results.
  • You can view the full analysis from the report here: CVC Ratings Report

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