Cablevision Sees 4Q Revs Rise 11%

Cablevision Systems Corp. surprised analysts with its net quarterly income. It moved into the black, as a result of improved sales from its core digital video, broadband and telephone businesses.

Net income for the cable operator for the fourth quarter 2007 was $6.64 million, against a third-quarter 2007 net loss of $79.3 million, and a $23.9 million net lost in the fourth quarter of 2006. Fourth-quarter 2007 revenue was up 11% to $1.84 billion.

Digital video subscribers rose by 43,000, or 1.7%, against the third quarter. Digital subscribers rose 7.4% overall in the prior year. Cablevision also grew its broadband business by 2.8% or 62,000 customers, versus the third quarter. For the full year, subscribers were up 12% from the December 2006 quarter.

The company's best growth story came from its land-line phone business. Digital phone customers rose 6.8% or 102,000 over the third quarter. Subscribers rocketed up by 31.7% over the prior year. Analysts were somewhat surprised at Cablevision's results, considering that the company had previously warned analysts about Verizon's FiOS video service moving into the Cablevision cable territories.

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As a result, Cablevision's stock moved up sharply on Thursday--at one point rising 3.6% to $27.88.

Rumors that Cablevision might sell its Rainbow Media division--the cable network division, which houses AMC, Independent Film Channel, WE: Women's Entertainment and various regional sports networks--may have helped. Revenues improved by a solid 14.2% over the previous year to $244 million. Advertising revenue at the cable networks climbed 15%, mostly from sales at AMC and WE.

As media executives--such as CBS Corp. Les Moonves, and Josh Sapan, president of Rainbow Media--have noted previously, Rainbow has not seen a notable impact from the slowing U.S. economy.

Cablevision Chief Executive James Dolan declined comment about a published report earlier this week that the company has hired Bear Stearns to help it explore a possible sale of Rainbow Media. Estimates are that Rainbow could be worth some $3 billion.

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