A loss of 28,000 video subscribers may sound like big trouble for a cable company, but Cablevision Systems Corp. is taking the decline in stride.
In fact, despite that precipitous drop in TV subscribers, Cablevision still managed to beat Wall Street’s first-quarter expectations, according to an earnings statement issued Monday.
The Bethpage-based television, telephone and Internet provider finished the quarter ended March 31 with net income of $44.6 million, or 16 cents per share. That’s light-years from the $89.8 million in net income (34 cents per share) Cablevision reported in 1Q 2014, but that year-earlier period was boosted by a $26.8 million income tax benefit, while 1Q 2015 was marked by a $37.9 million income tax expense.
Adjusted for discontinued operations, earnings per share were 20 cents, besting the 17-cent estimate of 11 analysts surveyed by stock watcher Zacks Investment Research.
The rest of Cablevision’s financial news was equally bright: First-quarter revenues rose 2.5 percent year-over-year to $1.61 billion, meeting Wall Street expectations; consolidated adjusted operating cash flow increased 4.5 percent to $454 million; and quarterly operating income rose 8 percent to $223.8 million.
And while Cablevision share prices have declined roughly 1 percent since Jan. 1, they’re still up over 22 percent since the start of 2Q 2014.
Even with the loss of those 28,000 video subscribers, Cablevision still boasts over 2.65 million video customers – and the sting of the departed was soothed by an increase in average monthly per-customer cable revenue, up from $148.22 in 1Q 2014 to $155.34 in 1Q 2015.
Cablevision also lost 14,000 telephone customers in the first quarter, but rolled with it thanks to the addition of 7,000 broadband customers, pushing its high-speed data subscribers past 2.77 million.
Despite the fluctuating customer base, Cablevision CEO James Dolan cited “a solid start to 2015” in a Monday conference call with investors. Dolan said the company would respond to “evolving consumer demand by expanding our product offerings to provide greater value and flexibility.”
“Today’s digital consumer expects to be connected all the time on all devices wherever they are,” the CEO noted. “Cablevision’s path for continued success is to stay ahead of these changes.”
As examples, Dolan referenced the February launch of Freewheel – the company’s Wi-Fi-based phone service – and the March agreement that made HBO’s on-demand service, HBO Now, available to broadband customers. That deal made Cablevision the only U.S. cable provider to offer the full suite of HBO products, according to the CEO.
And in April, Cablevision announced plans to become the first cable or satellite operator to distribute the free video-on-demand service Hulu to customers.
“We have been advancing connectivity to a broader set of consumers and providing innovative product and service options,” Dolan told investors. “We are taking bold steps to connect and serve customers in new ways.”