Cablevision crunch

Disappointing Q2 earnings drop stock

Cablevision Systems Corp. gave up $2.06 a share to close at $83.38 Tuesday after the Woodbury, N.Y., cabler fell 5% short of second-quarter earnings expectations.

Although Cablevision narrowed its net loss 5% to $123 million in the quarter ended June 30, a consensus among analysts pegged that figure at $117 million.

Revenues, meanwhile, soared 83.6% to $805 million.

Operating cash flow, or operating profit before depreciation and amortization, increased 54.9% to $221.7 million for the hyperactive cabler, which since the year-earlier period has acquired 10 cable television systems in New York and New Jersey from Tele-Communications Inc.

Acquisitions included

Cablevision said the results also include the acquisition of Radio City Productions and A-R Cable Services, as well as additional interests in Madison Square Garden L.P., A-R Cable Partners and Cablevision of Framingham Holdings.

Once Cablevision’s base period is adjusted to encompass these and other transactions, the company’s operating cash flow rose a more modest 13.4% on a 14.7% revenues gain.

Not included in the results were contributions from recently acquired electronic retailer Nobody Beats the Wiz and Cablevision’s deal-in-progress to buy cable systems in Hartford, Vernon, Branford and Lakeville, Conn., for 2.9 million newly issued shares and $135 million in cash and assumed debt.

As for Cablevision’s core business, subscriptions gained 2.8% over the year to total 3.4 million cable customers, concentrated in New York, Boston and Cleveland.

Each subscriber paid an average of $42.24 in June 1998 — 7.8% more than a year ago.

Cable reps 10.4% increase

Cable’s $468.8 million contribution to Cablevision’s total sales represented a 10.4% increase, and its $202.4 million contribution to operating cash flow represented a 13.5% increase.

The company’s other major operation, Rainbow Media Holdings, owns 50% of Fox Sports Net and manages news, entertainment and sports programming. Its $246.2 million contribution to sales represented 16.8% increase, and its $28.8 million contribution to operating cash flow represented a 7.8% increase.

James L. Dolan, the cabler’s CEO, said the report “reaffirms the strength of our core cable clusters and the promise of our new and existing businesses.”

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