Cablevision Systems reported restated Q2 results, which it had to revise after the discovery of improper accounting for executive stock options from 1997 to 2002. The company said in its SEC filing that it was served a grand jury subpoena from the U.S. District Attorney concerning its stock option practices.
Cablevision also said in its filing that two of its directors, both named in the subpoena, had resigned from its board’s compensation and audit committee.
Cablevision is only one of several dozen companies embroiled in the same stock-option scandal. All engaged in backdating the options, which allowed holders of the options to buy stock at prices below market value.
Net revenue for the second quarter of 2006 grew 15.6% to more than $1.4 billion compared to the prior year period. Just slightly over $1 billion of the total was generated by cable TV and associated operations; the majority of the balance was from CableVision’s Lightpath division and its pro sports holdings. Operating income grew 75.1% to $166.5 million, but net income was down significantly, from $213.8 million a year ago to $14.6 million in the most recent Q2.
In the quarter, Cablevision added more than 385,000 revenue generating units (RGUs), encompassing video, high-speed data and voice; it was the company’s highest second quarter RGU gain.
The company’s tally of basic video customers was up 35,000 in the quarter, digital video customers were up 143,000, high-speed data customers up 84,000, and VoIP customers up 122,000.