Cablevision adds subs, beats expectations in Q2 2012
Michelle Clancy | 08-08-2012
U.S. cable MSO Cablevision Systems felt the bite of spinning off AMC Networks last year, capex investment and managing subscriber churn as it saw its profit fall 28% to $63.5 million, or 24 cents per share, in the second quarter.
Despite the decline, it still beat analyst expectations, and was less of a drop than in the previous three quarters.
Revenue was up for the first time in four quarters, coming in at $1.70 billion, which is up a half percent from last year, excluding the impact of AMC Networks on the year-ago quarter. Analysts were expecting $1.69 billion.
In a quest to stop subscriber drain, the cableco has changed its business strategy to focus on improving its broadband networks in order to attract and keep customers for the high-margin service. It spent $296.4 million in capex in the quarter, an increase of more than 38% year over year. At the same time, it kept its subscription packages steady, not raising prices.
Meanwhile, the spinoff of Mad Men network AMC, which was accretive in terms of profit for Cablevision, took a bite out of the year-over-year results as well.
Meanwhile, Cablevision was the only MSO in the quarter to add net subscribers (the second-straight quarter for reporting additions), thanks to 25,000 new broadband customers, and 23,000 additional voice subscribers. It did however lose 26,000 video subs in the second quarter—traditionally the worst quarter for cable TV signups thanks to seasonal changes of school letting out, people going away for the summer and second-run programming.
Cablevision is the lastest MSO to lose video subs: Time Warner Cable lost 130,000 in the quarter; Comcast lost 238,000; and Charter lost 79,000.