Cablevision adds subs, but loses profit

Michelle Clancy ©RapidTVNews | 04-05-2012

In a rare reversal of fortune for the cable segment, Cablevision Systems saw a video subscriber growth of 7,000 new customers in the first quarter of 2012--the company's first net addition in six quarters. But that success was offset by falling profit.

"Unfortunately, subscriber growth is only half the story," said Bernstein analyst Craig Moffett said in a research note.

And that story is a tale of a price war. Operating cash flow fell 7.6% year-over-year, to $513.5 million, and ARPU is down $1.57 from the last quarter thanks to Cablevision's strategy of keeping its rate packages low in the face of the competition, which includes incumbent Verizon in the New York area. Overall, Q1 2012 earnings came in at $57.2 million, compared with $104 million one year ago.

The company is also losing money on its Clearview Cinemas movie theater chain, which operates in the New York tri-state area. It is now exploring strategic options, including a possible sale.

The company, like many, is however seeing robust success in broadband: it added 42,000 high-speed data customers.