Cablevision Cropped By Competition
The pain continues for cable companies as Cablevision (CVC) 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)
reported surprisingly high customer losses in areas where competitors have rolled out services.
Strong promotion of high-definition programming by satellite broadcasters
DirecTV
(DTV)
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and
EchoStar
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along with the entry of phone companies like
AT&T
and
Verizon
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in the video market has helped
lure customers away from cable players like
Comcast
(CMCSA) - Get Comcast Corporation Class A Common Stock Report
and Time Warner Cable.
Cablevision shares fell 70 cents to $25.81 in early trading Thursday.
