Cablevision's Lower Prices Pay Off
The company added 7,000 video subscribers -- a rarity for U.S. cable operators these days -- versus an expected loss of 7,400 subs, extending its total to 3.25 million. It also added 41,800 high-speed Internet subs and 42,400 VoIP customers, beating expected gains of 22,000 and 25,000, respectively. The MSO ended the quarter with 3.0 million cable modem subs and 2.39 million voice customers.
Cablevision used aggressive pricing ($70 a month for a two-year guarantee for the MSO's triple play sans a contract) to win back customers, but its average revenue per user (ARPU), at $152.53 and up 1.9 percent year-over-year, was "predictably lethargic," according to Sanford C. Bernstein & Co. Inc. analyst Craig Moffett. (See Another Ex-Cablevision Exec Lands at Charter.)
The cable company posted a profit of $57.2 million, or 21 cents a share, on revenues of $1.65 billion. Analysts were anticipating a profit of 19 cents on revenues of $1.66 billion.
Revenues at Optimum Lightpath , Cablevision's Ethernet services arm, came in at $79.5 million, though analysts were expecting $83 million.
The financial miss was a drag on Cablevision's stock, with shares down 8.37 percent ($1.23) to $13.47 each in afternoon trading Thursday.
— Jeff Baumgartner, Site Editor, Light Reading Cable