NEW YORK (TheStreet) -- Shares of Cablevision Systems Corp. (CVC) are up 1.87% to $16.87 on heavy trading volume as the company said it swung to a profit in the first quarter, driven by higher rates and advertising sales that boosted its cable revenue, the Wall Street Journal reports.
The company's results significantly outpaced market expectations, even as it lost customers during the quarter.
The cable provider reported a profit of $89.8 million, or 33 cents per share, compared with a year-earlier loss of $16.1 million, or six cents per share. The year-earlier period included a loss of $71.7 million on equity derivative contracts and a $9.3 million loss from discontinued operations.
Overall revenue was up 4.3% to $1.58 billion, while cable advertising revenue gained 17%.
Analysts polled by Thomson Reuters expected per-share profit of three cents and revenue of $1.56 billion.
In the latest period, Cablevision's total customers declined by roughly 2,000 to 3.19 million from a year earlier. The company lost a net 14,000 video customers, but that was partially offset by gaining broadband and voice customers, the Journal said.
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 revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for CABLEVISION SYS CORP is rather high; currently it is at 52.04%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.27% trails the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 55.5% when compared to the same quarter one year ago, falling from $116.54 million to $51.84 million.
- Net operating cash flow has decreased to $321.46 million or 39.71% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: CVC Ratings Report