Cablevision Beats Q2 Earnings and Revenues on Higher ARPU

Zacks

Cablevision Systems Corp. (CVC) reported strong financial results for the second quarter of 2014 with both the top and the bottom line surpassing the respective Zacks Consensus Estimate. Notably, average revenue per user (:ARPU) increased significantly. Cablevision Systems currently has a Zacks Rank #3 (Hold).

Quarterly GAAP net income from continuing operations was $91 million or 34 cents per share compared with $28.2 million or 11 cents per share in the prior-year quarter. Second-quarter adjusted earnings per share of 25 cents were well above the Zacks Consensus Estimate of 15 cents.

Total revenue, in the second quarter of 2014, came in at $1,628.1 million, up 3.7% year over year and also outpaced the Zacks Consensus Estimate of $1,598 million.

Quarterly operating income was $255.9 million against $197.8 million in the comparable quarter of last year. Operating margin was 8.4% compared with 12.6% in the prior-year quarter. Quarterly average monthly cable revenue per customer stood at $152.72 compared with $144.74 in the year-ago quarter. Meanwhile, average monthly cable revenue per video customer was $174.14 against $162.42 in the prior-year quarter.

In the second quarter of 2014, Cablevision generated approximately $487.3 million of cash from operations against $439 million in the year-ago quarter. Free cash flow, in the reported quarter was $248.2 million against $180.5 million in the prior-year quarter. As of Jun 30, 2014, the company had $906.8 million of cash and cash equivalents and $9,875.6 million of debt outstanding.

Segment Wise Revenues

The Cable segment’s revenues stood at $1,454.9 million, up 3.7% year over year. Within this segment, Video revenues totaled $806 million, up 1.6% year over year. High-Speed data revenues were $354 million, up 4.7% year over year. Voice revenues were $227 million, up 7.6% year over year. Advertising revenues totaled $41 million, up 7.9% year over year. Other revenues were $27 million, up 17.4% year over year.

The Lightpath segment’s revenues came in at $88 million, up 6.7% year over year. Other revenues were $94.9 million, up 0.4% year over year. 

Subscribers Statistics

As of Jun 30, 2014, Cablevision had 2.771 million video subscribers, 2.779 million high-speed data subscribers and 2.273 million voice subscribers. In the reported quarter, the company lost 28,000 video subscribers, 9,000 high-speed data subscribers and 7,000 voice subscribers.

The second quarter of any year generally remains seasonally weak for the pay-TV industry. In the reported quarter, major cable TV operators including Comcast Corp. (CMCSA), Time Warner cable Inc. (TWC) and Charter Communications Inc. (CHTR) witnessed loss of significant number of video subscribers. 

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