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Cablevision losses widen, but operations show growth

By James Bernstein | james.bernstein@newsday.com

9:47 AM EDT, May 8, 2008

Cablevision Systems Corp., the largest provider of cable television in the metropolitan area, said Thursday its losses widened in the first quarter as the result of losses in investments.

The Bethpage-based company, Long Island's second-largest in terms of sales, said it lost $31.6 million in the quarter, compared with a loss of $26.3 million in the same period last year.

Cablevision said it lost 11 cents a share, compared with a loss of 9 cents in the year-earlier period.

The company said revenues rose 10.1 percent, to $1.72 billion.

Cablevision reported a loss of $104.9 million in derivative contracts in the quarter, compared with a gain of $65 million in the first quarter of 2007.

Derivative contracts can be based on such assets as commodities, stocks, bonds, interest rates or exchange rates. They are controlled by movements in the markets.

Cablevision has been said to be interested in buying Newsday from its owner, Tribune Corp. of Chicago. Cablevision made no reference to a possible purchase of Newsday, or its reported bid of $650 million, in its earnings release. News Corp. owner Rupert Murdoch, who has reportedly bid $580 million for Newsday, said Wednesday he expects to complete a deal to buy Newsday soon.

Outside of the investment income decline, operations showed growth. In its release, Cablevision said cable television unit recorded revenue growth of 10.5 percent in the quarter.

Revenues in the company's Rainbow unit grew 15 percent, and Optimum Lightpath revenues rose 12.2 percent, the company said.

James Dolan, Cablevision's president and chief executive, said in a statement before markets opened that the company "added customers across all of our consumer services, including basic video." He said Cablevision also became the first cable company to achieve 50 percent penetration rate for high-speed Internet.

Cablevision said basic cable customers increased 2,000 from December 2007 and decreased 14,000, or 0.4 percent, from March '07.

Interactive Optimum digital video customers were up 41,000, or 1.6 percent, from December, 2007 and 158,000, or 6.3 percent, from March '07.

Cablevision added 2,000 basic video subscribers and gained 93,000 customers for phone service, the company said. Cablevision is being challenged on Long Island by the giant telecommunications company Verizon for phone and cable customers.

Cablevision said first quarter revenue at its Madison Square Garden unit grew 7 percent, to $265.1 million. Madison Square Garden includes the New York Knicks basketball team, the New York Rangers hockey team, the New York Liberty women's basketball team, and MSG Entertainment.

In early trading Thursday, shares of Cablevision were up 21 cents to $23.96.