Cablevision returned to profit in the fourth quarter as revenue jumped for its Rainbow Media and Madison Square Garden units. A court ruling caused the company to take a loss a year ago from discontinued operations.
Net income was $6.64 million, or 2 cents a share, compared with a loss of $23.9 million, or 8 cents, a year earlier, the company said in a statement today. Revenue at the cable-television company, which has about 2.6 million New York-area subscribers, increased 11% to $1.84 million. Excluding discontinued operations, earnings rose to 3 cents a share from 2 cents.
Revenue at Rainbow, which includes IFC and AMC channels, jumped 14% as the popularity of shows such as “Mad Men” helped boost advertising sales. The show won a Golden Globe Award this year for drama series. Sales at MSG, which includes Radio City Music Hall and the MSG television network, surged 18%.
“Advertisers are responding extremely well to what we’re doing at AMC,” Rainbow President Josh Sapan said Thursday morning in a conference call with investors. “We’ve seen significant price increases” to advertising rates.
Overall, Cablevision’s revenue beat the $1.78 billion average revenue estimate of analysts in a Thomson Financial survey. Sales at its primary cable television business increased 8.6% on an increase in subscribers amid competition from such services as satellite television and Verizon’s FiOS Internet television.
“That Cablevision reported positive basic subscribers is a remarkable feat given the extensive overlap with Verizon’s FiOS,” said Sanford Bernstein analyst Craig Moffett in a note to clients today. The increase “represents a clear positive surprise versus expectations which have been persistently bearish in terms of long-term subscriber retention.”
Earlier this week, the New York Post reported that Cablevision has hired Bear Stearns to explore a possible sale of Rainbow, which Moffett, in a separate note, estimated may be worth as much as $3 billion. The company declined to comment today on its plans for Rainbow.