Video services

Cablevision's Lower Prices Pay Off

Cablevision Systems Corp. (NYSE: CVC) posted a first-quarter profit thanks to aggressive pricing for broadband and video services. But the company missed its financial targets for the quarter, leading to a slight stock slip.

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

Jeff Baumgartner 12/5/2012 | 5:34:10 PM
re: Cablevision's Lower Prices Pay Off

CFO Gregg Siebert noted on the call that the $69.95 triple play offer is no longer being offered, so we'll have to see how sub growth holds up  when CVC reports Q2. JB


AESerm 12/5/2012 | 5:34:09 PM
re: Cablevision's Lower Prices Pay Off

So which is the better metric? Video subs or revenue/profit? They surpassed the analysts' expectations on subs but missed their own financial goals. The end of $69.95 must play into how they're re-siting their scope here.

Jeff Baumgartner 12/5/2012 | 5:34:08 PM
re: Cablevision's Lower Prices Pay Off Based on today's stock movement they are giving cablevision less credit for the subscriber gains.jb
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