Cablevision is shopping its Clearview Cinemas movie theater chain, which has 45 theaters in the New York tri-state area including the famed Ziegfeld in Manhattan, the company’s CFO said on today’s earnings call.
Chief Financial Officer Gregg Seibert told investors that the company planned to explore strategic alternatives with Clearview Cinemas.
“It is not a strategic asset for us,” Seibert said, adding the company was in the early stages of exploring its options in a process it hopes will be “robust.”
Cablevision had previously tried to sell the chain in 2002. Seibert declined to comment on the movie chain’s earnings before interest, taxes, depreciation and amortization but said “it’s a negative number.”
The announcement came after Cablevision said it added more video subscribers than expected in the first quarter, 7,000, reporting its first gain in new cable TV customers in at least six quarters, driven by a new pricing strategy.
But the company’s shares fell nearly 9 percent on Thursday, which analysts said was because investors were worried about its slowing financial growth as it ramps up investment in infrastructure and offers discounts on its services. Its operating cash flow fell 7.6 percent from a year ago to $513.5 million.
Cablevision said at the end of February that it did not plan to raise prices this year, which surprised investors and sent its shares tumbling more than 10 percent at the time.
“It’s pretty clear Cablevision gathered up themselves and fought back to stop the bleed in subscribers, but my question is, is their pricing strategy sustainable?” Brean Murray analyst Todd Mitchell said.
The gain of 7,000 subscribers beat the loss of 7,400 that Wall Street analysts were expecting, according to StreetAccount data. The company added 42,000 high-speed data customers, beating StreetAccount estimates of 22,000.
But it made $1.57 less per subscriber compared with a quarter ago.
“Unfortunately, subscriber growth is only half the story. Cable operators also depend on (revenue per subscriber) growth … and good old-fashioned price increases,” Bernstein analyst Craig Moffett said in a research note.
Cablevision, which also owns a newspaper and local cable networks, posted first-quarter earnings of $57.2 million, or 21 cents a share, compared with $104 million, or 37 cents a share, a year earlier.
The results beat analysts’ estimates by 2 cents a share, according to Thomson Reuters I/B/E/S.
The company spun off AMC Networks last summer, so the first quarter of 2011 still included revenue from that unit.
Revenue rose 0.2 percent to $1.66 billion, narrowly missing estimates of $1.67 billion.
Cablevision’s shares were down 8.4 percent at $13.45 in midday trading.