(Updates with analyst’s comment in seventh paragraph.)
Oct. 28 (Bloomberg) -- Cablevision Systems Corp., the fifth-largest U.S. cable-TV provider by subscribers, reported profit declined 65 percent as video customers defected and expenses for programming and marketing rose. The stock fell.
Net income dropped to $39.3 million, or 14 cents a share, from $112.1 million, or 37 cents, a year earlier, Bethpage, New York-based Cablevision said today. Analysts predicted 32 cents, the average of estimates compiled by Bloomberg. Sales rose to $1.67 billion, meeting the average analyst projection.
The company lost 19,000 video subscribers, fewer than the 26,000 average estimate of nine analysts surveyed by Bloomberg. Cablevision’s market has a 40 percent overlap with Verizon Communications Inc.’s FiOS, leading to a “hyper competitive dynamic” that makes it difficult for the company to grow, said Todd Mitchell, a Brean Murray Carret & Co. analyst in New York.
“Cablevision has the most difficult competitive situation of any of the major cable operators,” Mitchell said.
The company incurred a $16 million expense related to Hurricane Irene and a $95.4 million loss on investments. Expenses were also boosted by higher programming and sales and marketing costs, Cablevision said.
The shares fell 8.6 percent to $15.83 at 9:36 a.m. New York time. It had lost 27 percent this year before today. Cablevision bought back $93.9 million in shares in the quarter, less than the $143.9 million it spent in the second quarter.
Broadband customers rose by 17,000 and telephone customers increased by 38,000. Both topped estimates by analysts, who predicted 6,700 high-speed data additions and 12,000 new voice customers, on average.
“The focus is going to be on why earnings were down in the New York properties, but the net adds are good,” said Vijay Jayant, an analyst at International Strategy & Investment Group in New York.
In June, Cablevision spun off AMC Networks, which owns television stations AMC, Sundance Channel, IFC and WE tv.
(Cablevision plans a conference call at 10 a.m. New York time. Visit www.cablevision.com/investor/index.jsp to listen.)
--Editors: Ville Heiskanen, James Callan
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