Cablevision Pleases the Street

Rainbow Media's cable channels continue to attract considerable attention from Madison Avenue. The unit which includes AMC, WE TV and IFC collectively saw a 20% bounce in ad revenue in the fourth quarter, compared with the same quarter a year ago. The Cablevision-owned unit which also houses Sundance Channel, News 12 and a handful of other ventures, saw a gain on higher ad units sold at AMC and better ratings at the women-themed network WE TV. All three channels increased their subscriber base over the year ago period.

Affiliate revenue rose 7.6% though the programming division also recorded a 22% increase in operating costs on increased spending on shows and marketing. Net revenue at Rainbow grew 6.7% to $282 million for the fourth quarter, beating consensus expectations of 3%, though earnings were below consensus estimates, up 3.7% for the year at $69 million. Operating income grew to $45.8 million in the period. Full year net revenue was up 6.5% to $1 billion at Rainbow Media.

Ad revenue at the local cable TV operation was $33 million for the final quarter of the year, up slightly from the $28 million the company booked during the same time last year.

Cablevision Systems Corp.'s recorded a total revenue increase of 5% to $2.1 billion in the fourth quarter, though Newsday revenue dragged down results with a 15.7% decline in revenue at $90 million. For the full year 2009, Cablevision's net revenue rose 7.5% to $7.7 billion. Cablevision completed the spin-off of Madison Square Garden earlier this year.

Bernstein Research saw the company's overall results in a positively. Senior analyst Craig Moffet wrote in a note today, (Feb. 25), "They have weathered the storm from Verizon FiOs with remarkable success; over the five years since Verizon's first incursion into Cablevision's business, Cablevision has grown its customer relationships by 273,000." Moffet added: "The company is, in short, a machine."