Updated from 11:14 a.m. EST
A tanking economy and heavy competition are testing
Cablevison swung to a big loss amid solid sales and subdued subscriber growth in the fourth quarter.
The Bethpage, N.Y., cable provider posted a net loss of $321 million, or $1.11 a share, compared to a profit of $6.6 million, or 3 cents a share, in the year-ago period.
Total sales for the fourth quarter ended Dec. 31 were $2.05 billion, up 11% from $1.8 billion in the same period last year. Analysts were looking for an adjusted profit of 33 cents a share on $2.06 billion in sales, according to Yahoo! Finance.
Cable companies along with telcos like
have been in a brutal battle for one another's customers. The so-called triple-play service bundles and package prices have created a high rate of churn as customers jump from one provider to another, with no single winner emerging.
This brutal competitive climate is made worse by the steepening recession, which has consumers looking to trim costs and cancel services to conserve cash.
Unlike No. 1 cable player
, which posted solid numbers despite a
, Cablevision managed to hold on to customers. The company says it increased its revenue-generating units -- a measure of total services sold -- by 100,500, or 1%, over the third quarter and by 6.8% in a year.
Cablevision lost 3,800 or less than 1% of its basic TV subscribers in the quarter, much less than analysts expected. And the company managed to see a slight increase in subscribers to other services. Since the end of the third quarter, digital TV users increased by 22,800 or .8%, cable modem customers were up 28,200 or 1.2% and phone customers grew by 53,400 or 2.9% in the fourth quarter.
"Cablevision delivered strong results for 2008, despite the economic downturn," says CEO Jim Dolan in a press release Thursday.
Cablevision's $650 million acquisition of Tribune's Newsday last year led to a $402.4 million impairment charge to account for the drop in the value of the business and advertising revenue declines.
For the fourth quarter, Cablevision generated $60 million in free cash flow, which was below analysts' estimates of around $150 million.
The company did not offer any immediate financial forecast for 2009.
As for its overall financial strength, the company says it's still doing well.
"The proceeds from our recent successful debt financings, our cash flow and the capacity we have under existing credit facilities have positioned us well from a near-term liquidity perspective," Dolan said in the press release.
Cablevision shares rose 4% in early trading Thursday.