Listen to this article
Cablevision on Tuesday offered further evidence of the popularity of bundled video, telephony and internet services with subscriber growth in the first quarter the strongest since 2000.
The Dolan family-run cable operator, based in New York state, with more than 3m subscribers, said its first-quarter loss fell on the back of the higher than anticipated subscriber growth and raised its full-year forecast for new customers.
“The Cablevision results were outstanding,” said Douglas Shapiro, analyst at Bank of America. “It beat on every key metric … with the second consecutive quarter of margin expansion.”
The strong results echo those recently seen from bigger cable operators.
Comcast and Time Warner Cable, the biggest in the US, have also reported better than anticipated results. The ability to offer telephony services alongside video and high-speed internet connections are pulling in more people and keeping them as subscribers for longer.
Shares in the sector have risen as a result. Cablevision’s shares rose 1.63 per cent in New York morning trade to $21.24.
Investors had marked down valuations for cable companies amid concerns about a price war with telecommunications rivals such as Verizon and AT&T. Although these companies are rolling out video services too, they only offer a bundle of three products in a relatively small part of the US.
“The [Cablevision] results continue to show the competitive advantage conferred by cable’s low cost/high capacity plant versus both telcos and satellite,” said Craig Moffett, analyst at Sanford Bernstein.
Cablevision said its quarterly net loss fell to $58.9m, or 21 cents a share, from $118.9m, or 41 cents a share, in the first quarter of last year. Revenue for the quarter rose 16.2 per cent to $1.41bn from $1.2bn.
The company raised its 2006 outlook for basic video subscriber growth, saying it expected an increase of 2.5 to 3 per cent, compared with previous guidance of an increase of 2 to 2.5 per cent rise.
Revenue growth in the quarter was also boosted by the company’s sports unit.