Updated from 10:29 a.m. EST
shares rose Tuesday morning after the cable and sports conglomerate posted solid financial progress.
The Long Island-based company reported solid revenue and subscriber growth in its core TV and data division. Cablevision predicted those trends would continue for the balance of the year.
The cable and sports conglomerate lost $63.2 million, or 22 cents a share, in the three months to Sept. 30, compared with a loss of $107 million, or 37 cents a share, last year. Revenue rose 20% from a year ago to $1.17 billion. Analysts had been forecasting a loss of 35 cents a share in the latest quarter on revenue of $1.15 billion.
The stock was up 79 cents Tuesday morning, trading at $20.73.
The company shrugged off questions about the coming auction of the bankrupt Adelphia Communications, a deal that rivals
have both expressed interest in. Asked about acquisitions, CEO Jim Dolan said, "We will not compromise the free cash flow in order to expand the footprint."
Meanwhile, operating chief Tom Rutledge indicated that much of the advanced services growth came from a promotion launched at the end of June that bundled digital video, telephony and high-speed Internet in a discounted bundle. "The whole offering has caused the value proposition to move in our direction," he said.
Dolan linked the company's "vision" for Voom to his father's view of the cable industry when he launched CVC's empire. "We understand maybe not everybody agrees with that vision" for Voom, Dolan said.
Cablevision said its preferred measure of profitability, consolidated adjusted operating cash flow, rose 13% from a year ago to $352.9 million, reflecting higher revenue in its cable television and broadband services units and at Rainbow Media. Analysts had been expecting a cash flow figure of $320 million.
In the Telecom Services unit comprising the consumer cable business and the Lightpath business service, revenue rose 14% to $788.3 million, just ahead of analysts' expectations, according to
informal survey. Telecom adjusted OCF grew 16% to $317.4 million, also edging ahead of expectations.
Growth in advanced services far exceeded analysts' expectations in several categories. Cablevision added 80,000 high-speed data customers in the quarter, ahead of estimates of 50,000 to 60,000. Net new telephone customers amounted to 74,000, compared to expectations of less than 50,000. Digital video subscribers grew by 171,000, beating forecasts ranging from about 100,000 to 125,000.
Basic video subscribers grew by 850 households to 2.95 million units, matching analysts' expectations.
At Rainbow's core network division, third-quarter revenue rose 58% from a year ago to $235.9 million, while adjusted operating cash flow rose 39% to $92.6 million. Cablevision cited the consolidation of Fox Sports Net Chicago and Fox Sports Net Bay Area and "strong increases in affiliate and advertising revenue" for the improvement.
Looking ahead, Cablevision raised its estimate for 2004 net addition of revenue-generating units in its telecommunications segment to 1 million to 1.1 million, from its old estimate of 875,00 to 925,000. It now sees revenue growing in the segment at the high end of its old 13% to 15% range, while growth in adjusted operating cash flow will be at the top of its old 14% to 16% range.
Meanwhile, Cablevision's Voom satellite service,
which the company plans to spin off with certain programming services, continues to struggle. The high-definition television satellite service reported 26,000 "activated" customers, down 2,700 from
the figure it reported for the end of August.