Time Warner Cable Slips on Outlook
Time Warner Cable (TWC) notched a better-than-expected third quarter thanks to increased voice and data revenue, but the company's shares traded lower on the company's lowered outlook.
The New York-based cable provider said net income rose to $301 million, or 31 cents a share, from $248 million, or 25 cents a share, in the year-ago period. Excluding certain items, Time Warner Cable had a profit of 34 cents a share, which exceeded the Thomson Reuters average estimate by 28 cents.
Revenue increased 8% to $4.3 billion, although that number was unchanged sequentially, as a net increase in digital phone subscribers boosted total sales. Wall Street was looking for revenue of $4.35 billion, according to Thomson Reuters.
In addition to an increase in digital phone revenue, video revenue was up 4% to $2.64 billion and high-speed Internet revenue rose 12% to $1.05 billion.Time Warner Cable said it had a net addition of 522,000 revenue generating units, down from the 656,000 additions in the previous quarter. The company's Triple Play bundle subscriber count had 168,000 net additions, surpassing the 3 million mark. Despite net additions in digital video, high-speed data and digital phone subscribers, Time Warner Cable saw a sequential decline of 31,000 basic video subscribers. Additionally, the company's basic video penetration rate - the percentage of subscribers in a serviceable area -- slipped to 49.4% from 49.8% in the first quarter. Time Warner Cable's decline in basic video subscribers comes as no surprise, as several of its cable rivals have also seen numbers dwindle. A week earlier, Comcast (CMCSA) said its basic video subscriber count fell by 147,000 in the third quarter.
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