NEW YORK — Cablevision shares dipped Tuesday as the company unveiled plans to spend a hefty $1.5 billion-$1.7 billion next year to upgrade its systems for digital service.
Shares fell 7.2% to $59.85 even as the group posted upbeat first-quarter numbers. It swung to net income of $1.2 billion from a loss of $115 million the year before, mostly on gains from the sale of cable assets.
Revenue was flat at $1.05 billion as CEO James Dolan cited a weak advertising environment.
Company’s Rainbow Media unit also reported results for the first time as a separately traded tracking stock. Cablevision spun off the division, which houses a handful of national cable networks, earlier this year.
Revenue rose to $136 million from $111 million for the quarter. Operating cash flow eased to $24 million from $32 million. Nets owned include AMC, Bravo, IFC, WE: Women’s Entertainment, MuchMusic USA and Fox Sports Net channels in a handful of regions outside New York.
Bravo and IFC had particularly impressive increases in revenue, cash flow and subscribers due to better ratings and the fact that the nets, along with WE, start from a lower base of advertising than many of their competitors. That means they can grow faster even in a downturn.
Rainbow recently sold a 20% interest in the four cable networks to MGM for $825 million. “We have been working closely with our partners at MGM, and we believe there are a number of opportunities we hope to share with you in the coming months,” Dolan said.
Rainbow shares eased 3.5% to $22.10.
Cablevision’s other assets, which are focused in and around Gotham, include commercial telephone service, Madison Square Garden, the Knicks, the Rangers, Radio City Music Hall, Clearview Cinemas and electronics retailer the Wiz.