Cablevision misses sales estimates after customer losses

Cablevision Systems Corp., the fifth- largest U.S. cable provider in terms of subscribers, reported second-quarter sales that missed analysts' estimates after a surprise drop in total subscribers.

Revenue rose to $1.57 billion, the Bethpage, New York-based company said today in a statement. Analysts had estimated $1.58 billion on average, according to data compiled by Bloomberg.

Cablevision's total customers fell by 11,000 to 3.22 million in the period. Analysts had projected a gain of 33,000.

The company also is coping with escalating fees from cable- television programmers and a saturated market in broadband Internet, said Craig Moffett, an analyst at Moffett Research LLC in New York.

"Cablevision is between a rock and a hard place," Moffett said. "They have successfully penetrated their markets with broadband to such a degree that incremental growth will be very hard to come by." Cablevision serves customers in New York, New Jersey, Connecticut and parts of Pennsylvania. The company, which owns Newsday, lost 20,000 video subscribers, gained about 1,000 high-speed Internet users and added 3,000 phone customers last quarter.

The shares were little changed at $18.69 at 9:58 a.m. Friday. The stock had climbed 25 percent this year through Thursday.

The rally has been driven by speculation that Cablevision may be an acquisition target for either Time Warner Cable Inc., the second-largest U.S. cable company, or Charter Communications Inc., the fourth-largest, said Jaison Blair, an analyst at Telsey Advisory Group in Manhattan.

"If Cablevision doesn't get acquired, and I think the odds are very low, then Cablevision stock is a bubble waiting to pop," Moffett said.