Cablevision swings to loss on charges
CHICAGO (MarketWatch) -- Cablevision Systems Corp. said it swung to a fourth-quarter loss on previously-disclosed charges related to the decline in market value of its Newsday newspaper and the shutdown of its Voom HD service in the U.S.
The company saw greater demand for its video, broadband and phone services, but like other cable operators in this difficult economic climate, Cablevision indicated that subscriber growth is slowing as consumers try to conserve cash.
Results in the latest three months include, among other items, impairment charges of $402.4 million at Newsday, which Cablevision recently acquired from Tribune Co.
Accounting rules require companies to declare the book value of intangible assets such as the reputation, masthead, and subscriber lists of a newspaper. As newspaper advertising revenues have declined -- particularly since the worldwide financial meltdown triggered in September -- the market value of such assets has dropped sharply. The company must make note of the discrepancy between book and market values and write down the difference.
Revenue rose 11% to $2.05 billion.
On average, analysts polled by FactSet Research were expecting revenue of $2.06 billion.
Shares declined 6 cents to close at $13.31.
Cable television revenue rose 7.4% over the fourth quarter of 2007, to $1.26 billion. In the third quarter, cable revenue rose 10% year-over-year.
Basic video subscribers declined 3,800, or 0.1%, from the September quarter, and by 0.5% from the fourth quarter of 2007.
Digital video customers rose by 22,800, or 0.8%, from the quarter ended Sept. 30, about flat with the gain it saw from the second quarter to the third. Digital subscribers rose nearly 8% compared with the fourth quarter of 2007.
Broadband subscribers rose by 28,200, or 1.2%, from the quarter ended Sept. 30, about even with the 1.3% gain seen from June 30 to Sept. 30. Compared with the fourth quarter of 2007, high-speed Internet customers rose 7.6%.
Digital phone customers rose by 53,400, or 3% since Sept. 30, after growing 3.3% between June and September. Subscribers rose by 18% over the fourth quarter of 2007.
Revenue per cable customer was $134.85, up 1.3% from the September quarter. Here, the gain easily surpassed the 0.6% increase seen from June to September. Revenue per customer rose 7.8% from the prior year's fourth quarter.
Revenue from Cablevision's Rainbow Media cable networks -- including AMC, Independent Film Channel, WE: Women's Entertainment and various regional sports networks -- rose 14% from the prior year to $264 million. The increase was driven by a 9% increase in fees paid by cable and satellite operators and a 2.8% increase in advertising revenue.
At Madison Square Garden -- including the storied venue of the same name, the New York Knicks, the New York Rangers, the MSG regional sports network, and other assets -- revenue fell 2.1% to $405.8 million. Revenue from the unit's winter-themed productions dropped by nearly $20 million, due to the economic downturn.
Cablevision recently completed its acquisition of a 97% stake in Newsday from Tribune Co. for $650 million. Its newly-formed newspaper division turned in $107.1 million in revenue.
David B. Wilkerson is a reporter for MarketWatch in Chicago.
