Picture Brighter for Cablevision, Comcast

The picture is improving for cable giants Cablevision and Comcast. Both are enjoying increased revenue and profitability, according to figures released recently.

Demand for digital cable service and high-speed Internet access drove Cablevision Systems Corporation to a profitable fourth quarter, the company reported in mid-February. Net income for the fourth quarter 2002 was of $517.4 million, a huge improvement over the net loss of $281.6 million reported for the same period the previous year. Revenue grew 2.4% to $1.15 billion, from $1.12 billion.

The Bethpage, NY–based company, which serves about three million customers in the New York metro area, gained 136,000 customers during the quarter, most of them signing up for Cablevision's Interactive Optimum digital video package. It lost only 5300 basic-cable subscribers in the same period, ending the year with a total "digital" subscribership of 216,500.

Cablevision is the sixth-largest cable provider in the US. It other interests include the NY Rangers National Hockey League team, and operating Madison Square Garden and Radio City Music Hall in Manhattan. The company also has a 50% partnership with Fox Sports Net. Cablevision recently won a vote of support from the investment community when it announced that it would sell or close the remaining stores of its ailing Wiz electronics chain. Corporate revenue should grow between 10% and 12% in the coming year, execs estimate.

On February 28, Comcast Corporation reported that in its revenue rose 11% to $4.1 billion for the fourth quarter, due in large part to its acquisition of AT&T's cable operations. Combined earnings for the companies' cable businesses before interest, depreciation, taxes and amortization (EBITDA)—rose 7.7% to $1.19 billion. Like Cablevision, Comcast noted brisk demand for high-speed data services, the fastest growing segment of the cable industry.

The Philadelphia-based company predicts five million high-speed data subscribers by the end of 2003. That figure would make Comcast the largest broadband provider in the US. With the AT&T acquisition, Comcast is now the largest cable provider, projecting 21.3 million subscribers by the end of 2003. Comcast lost only 8000 subscribers in the fourth quarter, and plans to spend $4 billion this year to upgrade 45,000 miles of cable to enable video-on-demand, broadband service and other benefits for its customers. The company predicts EBITDA will reach between $6.2 billion and $6.3 billion in 2003, an increase of 26.5% from last year.