Eagan: Hurricane Sandy could cost Cablevision $25 to $40 million
Damage caused by Hurricane Sandy could cost Cablevision (NYSE: CVC) $25 to $40 million, Canaccord Genuity analyst Tom Eagan said in a research note Wednesday.
In addition to spending money to repair damage to its network in New Jersey, Long Island and other areas impacted by the storm, Sandy recovery efforts are making it difficult for Cablevision to perform new installations for its Optimum TV, Internet and phone service in the New York area. The MSO, which was scheduled to report its third-quarter earnings today, has delayed the release of its financial results until Monday.
Eagan said he came up with the estimated costs of $25 to $40 million by looking at the impact that Hurricane Irene had on Cablevision last year. The MSO said that Irene cost it about $20 million.
"Due to Hurricane Sandy, Cablevision will likely incur significant storm-related costs in Q4 2012," Eagan said. "Should costs related to Hurricane Sandy amount to $25 million or $40 million, we estimate (adjusted operating cash flow) would decline by 17 percent or 19 percent."
Eagan said he also expects that Sandy could see Cablevision delay a rate hike for its Optimum customers. CEO Jim Dolan told analysts in February that Cablevision would freeze rates this year, but executives have said recently that they were still open to the possibility of a price increase this year. Now, the company may wait until later in 2013 to hit Optimum customers with a rate hike, Eagan said.
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