• by Wayne Friedman , September 22, 2006

Amid swirling investigations into its stock-option practices, Cablevision Systems Corp. showed a narrower loss for its second-quarter results--and big-time ad gains for its cable networks.

Cablevision's loss from continuing operations was $26.1 million--or 9 cents a share--compared to a year-earlier loss of about $27 million, or 9 cents a share for the period ending June 30. Overall, for the second quarter, the company generated net earnings of $14.6 million, or 5 cents a share--down from $213.8 million, or 74 cents a share, in the three months ended June 30.

National ad revenue at the Rainbow Media networks--IFC, WE and AMC--saw a sizable 13.8 percent gain. The company said it was able to sell more inventory this year than a year before.

The results were delayed, and should have been released in August. That's when the company reported discrepancies in the dating of its stock-options grants. Cablevision said it received a subpoena from the U.S. Attorney's Office for the Eastern District of New York seeking documents related to the stock-options issues.

Many analysts are still positive or at least neutral on the company. Its core business--cable subscriptions--continues to climb from new digital products. Second-quarter revenue for this sector jumped almost 18 percent to 1.01 billion, while operating income rose 48.1 percent to $202.8 million. In 2006, the company said, basic cable subscriptions are expected to grow 3.5 percent to 4 percent.

Overall, company-wide second-quarter revenue rose to $1.42 billion from the prior year's $1.23 billion. That's generally better than analysts' expectations. Thomson First Call, which computes all analysts' estimates, was anticipating a loss of 12 cents a share on revenue of $1.41 billion.

In addition to disclosing its grand-jury subpoena, Cablevision announced the resignation of two board committee members: Richard Hochman from the compensation committee and Victor Oristano from the audit committee.