NEW YORK (AP) — Cablevision Systems Corp., the nation's fifth-largest cable TV company, said Wednesday that its fourth-quarter net income rose 45 percent, helped by its recent purchase of Bresnan Communications and a slight increase in phone and Internet customers.
Cablevision added a net 271,000 basic cable subscribers during the quarter to bring the total to about 3.3 million. Were it not for the Bresnan acquisition, it would have lost 35,000 basic cable customers, largely because of a fee dispute with News Corp., which left Cablevision subscribers without Fox programming for two weeks.
Earnings rose to $114 million, or 38 cents per share. That's up from $78 million, or 26 cents per share, a year earlier. Analysts polled by FactSet were expecting 42 cents per share.
Revenue rose about 6 percent to $1.87 billion from $1.77 billion. That was roughly in line with the $1.85 billion analysts were expecting.
The company said it lost basic cable subscribers in the wake of an October dispute with Fox. Cablevision had balked at the fees it was paying News Corp. to carry Fox channels on its lineups. As a result, Cablevision customers went without Fox programming for 15 days, and sports fans missed two World Series games.
"We were faced with a take-it-or-leave-it situation on very expensive programming costs," Chief Operating Officer Tom Rutledge said on a conference call.
Without providing specifics, Rutledge said the talks led to lower fees than Cablevision would have had to pay had it agreed to News Corp.'s terms right away.
"So we thought that taking the hit was worth it," Rutledge said. "But we thought it was a one-time kind of hit."
He said most of the cable subscribers who canceled their service had been buying television service only, and the company saw a rise in customers buying packages combining cable, telephone and Internet services.
Bernstein Research analyst Craig Moffat said Cablevision's losses in basic cable were the largest since Verizon Communications Inc. began offering its high-speed FiOS Internet and TV service. He added that the loss of 35,000 customers was worse than expected. He had predicted a loss of 14,000 customers, without accounting for any subscribers Bresnan might add.
Cablevision also added a net 190,000 digital cable customers and 140,000 telephone customers. Without Bresnan, growth was more modest with a net gain of 6,000 Internet customers and 9,000 phone customers. Moffat expected a net gain of 11,000 Internet customers and 18,000 phone customers. The Bresnan purchase, completed in mid-December, added customers in Montana, Wyoming, Colorado and Utah to Cablevision's New York-area operations.
All told, Cablevision said this increase in subscribers boosted revenue, as did higher fees.
Cablevision also reported 14 percent revenue growth from the Rainbow division, which owns pay TV channels such as AMC, Sundance and WE tv along with the IFC suite of independent film production entities.
In December, the company's board approved a plan to spin off Rainbow Media, creating two separate companies — one focused on cable, Internet and phone services and the other on programming. The spin-off will reduce Cablevision's $12.1 billion debt by about $1.25 billion.
The company expects the spin-off to close by mid-year, CEO James Dolan said in a statement Wednesday. On the conference call, the company's management team declined further comment.
For the full year, the company earned $361 million, or $1.20 per share, compared with $286 million, or 96 cents per share, in 2009. Annual revenue rose to $7.23 billion from $6.85 billion.
Cablevision will pay a quarterly dividend of 12.5 cents per share on March 21 to shareholders of record on Feb. 28. That's the same dividend the company issued in the most recent quarter.
Cablevision stock fell 37 cents, or 1 percent, to $37.05 in afternoon trading Wednesday.
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