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Able without cable

Street likes notion of cableless Cablevision

Despite the doomed satcasting venture Voom and the Dolan father-son boardroom battle, Cablevision shares soared to a 52-week high Wednesday on better-than-expected earnings and renewed speculation that the Dolans will finally sell their cable systems.

Cablevision founder and chair Charles Dolan wasn’t on hand as he usually is as his son, CEO James Dolan, briefed Wall Streeters on the company’s performance last quarter. Despite a wider loss of $305.8 million associated in great part to Voom, company impressed analysts with a strong uptick in cable customers and growth in its stable of Rainbow cable nets.

Shares jumped 8% in trading to close at $30.30, a gain of $2.25.

In recent weeks, the Cablevision board went against the wishes of Chuck Dolan and sided with Jim Dolan in deciding to sell money-losing Voom to EchoStar.

Not long after, controlling shareholders including Chuck Dolan and another son, Tom Dolan, inked a letter of intent to buy the remaining parts of Voom and house it in a new company to called Voom HD.

Jim Dolan declined to say during the earnings call Wednesday how his father and brother would fund the new venture.

And while he still wouldn’t say whether Cablevision is ready to sell off its cable operations or Rainbow, he did allow that nothing “precludes our ability to do a transaction that would bring even more value to our shareholders.”

Time Warner Cable is considered the likely bidder should Cablevision go on the block, as it would become the market leader in New York City.

Some analysts hung up from Cablevision’s earnings call predicting that such a sale would indeed happen in the next 12-24 months, noting Tuesday’s announcement that Cablevision and News Corp. will rejigger their regional sports biz so that Cablevision takes 100% ownership of Madison Square Garden.

“The rumor has always been out there that the end game would have Jimmy Dolan riding off into the sunset taking 100% of Madison Square Garden,” one analyst said.

“Most of the stock gain can be attributed to the decision to close and sell the Voom business. More recently, the stock has rallied on the operating strength of the cable business and the ongoing speculation that they are preparing the company for sale,” the analyst said.

Overall, Cablevision reported a loss of $305.8 million in the last quarter, compared to red ink of $197.3 million in the fourth quarter of 2003.

Revenues climbed 11% to $1.36 billion from $1.23 billion.

Cablevision’s cable TV revenue was up a healthy 14% to $773.5 million. Revenue from Rainbow nets AMC, the Independent Film Channel and Women’s Entertainment climbed 13% to $137 million thanks to increased affiliate and ad dollars.

Wall Street was particularly revved up over the 93,517 new high-speed Internet customers and 83,497 new Internet phone customers signing up for Cablevision service last quarter. Company signed 10,788 basic cable subs, bringing the total customer pool to 2.96 million.

Company’s aggressive “triple play” offer — which gives customers digital cable, phone and Internet for $90 per month — proved particularly popular, with 30% of all new customers signing up for the bundle.

Dragging down the bottom line, however, was Voom, which reported an operating loss of $449.8 million, with $349.9 million in writedowns.

“The cable business itself is firing on all cylinders,” another analyst noted.

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