In the third quarter of 2009, Cablevision Systems’ net income tripled from a year ago. The company’s cable systems lost some basic subscribers but grew RGUs, and revenues across the various cable-delivered services held steady or grew modestly.
The large profit increase, from $30.9 million in the third quarter of 2008 to $98.9 million in the third quarter of 2009 just completed, had less to do with operations, although revenue per user was up. The increase was attributable largely to legal settlements, a revival of advertising revenue in the Rainbow group and a bounce-back in operations at the Madison Square Garden unit, which Cablevision still plans to spin-out by the end of this year.
Cablevision lost 27,300 basic video customers (0.9 percent) in the quarter; that represents an acceleration of basic sub loss. In the past, MSOs have lost basic subs but gained digital video customers. Not for Cablevision this quarter. The operator’s digital sub count was down by 14,300 (0.5 percent) from June 2009. The company is still up 73,800 digital subs (2.6 percent) from September 2008.
Cablevision added 19,100 broadband customers (0.8 percent) in the quarter, however, and 34,000 VoIP customers (1.7 percent).
Total RGUs were up 11,500 (0.1 percent) from June 2009, and up 299,100 (2.9 percent) from Q3 a year ago. Revenue per user was $141.03, up $1.34 (1 percent) from the immediately preceding quarter, and up $7.92 (5.9 percent) from the third quarter of 2008.
Cablevision’s business services unit, Optimum Lightpath, saw net revenues increase 3.8 percent to $65.1 million. The improved results were due principally to the continued expansion of the more efficient, higher-margin Ethernet business and include the impact of the acquisition of 4Connections in October 2008.
Cablevision President and CEO James Dolan said: “Also noteworthy in the third quarter, Cablevision generated $220 million in free cash flow, our cable business surpassed two million voice customers and Rainbow National Services’ generated a significant increase in advertising revenue of more than 18 percent.”
