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By Muvija M and Jessica Toonkel
Feb 27 (Reuters) - U.S. cable operator Altice USA Inc , which is separating from European telecoms and cable group Altice NV, forecast revenue would rise this year as it rolls out its new streaming pay television and internet platform, Altice One. The company also posted a $2.42 billion gain due to changes in the U.S. tax law in the quarter, and shares of New York-based Altice rose 2.8 percent to $19 on the New York Stock Exchange in after-market trading.
Cable service providers have been facing subscriber attrition as more people opt for online video streaming services such as Netflix Inc and Amazon.com Inc’s Amazon Prime video service.
To stop cord-cutting, Altice last year launched Altice One, a set top box that combines traditional video, online streaming services and WiFi as well as other features.
It forecast revenue growth of about 2.5 percent to 3.0 percent for 2018 and posted fourth quarter broadband subscriptions that balanced a drop in pay TV customers.
Altice said it lost 25,000 pay-TV subscribers in the fourth quarter compared with 33,000 in the previous quarter. Broadband internet subscriptions rose by 25,000, up from 16,000 in the previous quarter.
Altice One is currently available to its Optimum customers, in the New York tri-state area and will be rolled out later this year to Suddenlink customers in the U.S. West, Midwest and South later this year, CEO Dexter Goei said on a call with reporters.
Earlier this month, Altice USA reached a distribution agreement with cable network Starz, ending a six week blackout . As part of that deal, Altice will sell Starz’ online streaming service to customers of Altice One.
Net income attributable to the company was $2.25 billion, or $3.06 per share, in the quarter ended Dec. 31, compared with a loss of $236.7 million, or 36 cents per share, a year earlier.
Revenue for the company rose 2.6 percent to $2.37 billion. However, the adjusted loss per share of 11 cents was wider than the 1 cent loss that analysts’ on average expected, according to Thomson Reuters I/B/E/S, as Altice spent more on programming.
Altice’s total programming costs rose 4.7 percent, while Suddenlink saw an 8.8 percent jump in programming costs in the fourth quarter, largely due to bringing back Viacom channels after a three-year blackout, the company said.
In January, Altice founder Patrick Drahi decided to split the U.S. and European operations of the heavily indebted telecoms and cable group into Altice USA and Altice Europe, a move intended to shield the U.S. operation from investor concerns about Europe.
The Netherlands-based Altice NV expects to complete the spinoff of its 67.2 percent interest in Altice USA by the end of the second quarter of fiscal 2018, following regulatory and shareholder approvals. (Reporting by Muvija M in Bengaluru and Jessica Toonkel in New York; editing by Arun Koyyur and Cynthia Osterman)