Cable and satellite TV operators post 3Q gains

But there are signs that pay TV's growth is slowing: Some pay-TV operators are signing up fewer new customers, and cancellation rates are higher than expected.

The bright side is that higher revenue from new subscribers to digital cable TV, Internet and phone services coupled with lower capital spending increased pay TV companies' cash flow and buffered them from the tight credit market.

Cablevision Systems Corp. said Thursday that it earned $27.1 million in the third quarter as strong gains in its cable service, programming and Madison Square Garden businesses reversed a loss a year earlier.

The Bethpage, N.Y.-based company earned 9 cents per share compared with a loss of $79.3 million, or 27 cents, in the same period a year earlier. And its revenue rose 15 percent to $1.74 billion, just above the average estimate of analysts polled by Thomson Reuters.

Cablevision, which serves 3.3 million subscribers in the New York area, also suspended plans to seek a sale or spin off of assets as long as current market conditions prevail.

DirecTV Group Inc., the nation's largest satellite TV operator with over 17 million customers, also credited growth in subscribers, higher subscription prices and lower capital expenses for its strong earnings report for the third quarter.

The El Segundo, Calif.-based company reported a 14 percent increase in net income to $363 million, or 33 cents per share.

Revenue rose 15 percent to $4.98 billion from $4.33 billion.

DirecTV's free cash flow rose more than fourfold to $332 million. But it added fewer new net U.S. customers in the quarter than a year earlier: 156,000, down from 240,000. The pace of cancellations also rose.