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The No. 6 U.S. cable operator said an internal audit had found $15 million in improperly booked expenses from 2002 and before, marking the third time since June that it has disclosed accounting irregularities.

While the amount of expenses at stake are insignificant compared to Cablevision's total revenue, a widening investigation could delay completion of a planned spin-off of the company's Rainbow television networks and a newly launched satellite broadcasting service, VOOM.

"I think this raises more questions than answers about the spin-off," said Kaufman Brothers cable analyst Mark May.

As a result of the audit, Cablevision said it would restate first-quarter and second-quarter results and revise its third-quarter results to reflect the improperly booked expenses. It said it is also reviewing whether any of its annual and quarterly results for the years 2000 to 2002 may need to be restated.

The Bethpage, New York-based company said the $15 million includes improperly booked expenses at its Rainbow Media Holdings division, which includes its cable networks, and other units it did not identify.

Cablevision is probing the accounting at Rainbow, as well as its telecommunications, Madison Square Garden, and corporate segments.

Cablevision plans to begin operating as two separate companies on January, but cannot complete the spin-off until the U.S. Securities and Exchange Commission (News - Websites) ends its inquiry into the company's accounting practices.

REVENUE FALLS SHORT

Cablevision, which also owns the New York Knicks basketball team and the New York Rangers hockey team, reported a third-quarter net loss of $104.6 million, or 36 cents per share, compared with a net loss of $79.5 million, or 26 cents a share, one year ago.

Revenue increased 12 percent to $975.8 million from $872.4 million, but fell short of analyst expectations.

Analysts surveyed by Reuters Research, a unit of Reuters Group Plc, had expected revenue of $985.1 million.

The company lost 8,900 basic cable subscribers in the third quarter, compared to a gain of 12,200 in the second quarter. Company executives attributed the shortfall to a slow system upgrade in New York City and increased competition from satellite broadcasters EchoStar Communications Corp. (NasdaqNM:DISH - News)and Hughes Electronics Corp. (NYSE:GMH - News)

Cablevision shares closed up 2 cents to $20.45 on the New York Stock Exchange (News - Websites) after earlier falling as much as 6 percent.

"I don't think people were thrilled by the results, but there was a bit of an overreaction," said Matthew Harrington, analyst at Janco Partners. "The fact that there were accounting errors at the company is upsetting, but the digital and data numbers aren't that bad."

Cablevision saw growth flag slightly in digital cable and high-speed Internet subscriber figures.

The company added 157,000 digital video subscribers compared to 196,000 in the second quarter. Net additional high-speed data customers eased to 63,700 from 68,000 in the second quarter.

Cablevision cut its outlook for full-year revenue growth to 9 percent to 11 percent from 10 percent to 12 percent.

It also announced that effective immediately it will be able offer Optimum Voice, its voice-over-cable telephone service, to all of its 4 million customers in New York, Connecticut and New Jersey.