Time Warner Cable
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,
said its basic video subscriber count fell by 147,000 in the third quarter.
Lately, shares of Time Warner Cable were slipping 56 cents, or 2.7%, to $20. Rival Comcast was down 2.5% to $17.32.
However, while Comcast said advertising revenue fell 10% to $374 million in the third quarter, Time Warner Cable said ad revenue grew 1% to $224 million "primarily due to an increase in political advertising revenues, partially offset by a decline in advertising revenues from national, regional and local businesses," the company said.
Looking ahead, Time Warner Cable said it anticipates its 2008 full-year earnings of $1.10 to $1.15 a share, compared with expectations of $1.13 a share, according to Thomson Reuters. However, Time Warner Cable said it expects revenue to rise 8% from a year ago, down from its previous projection of 9% growth.
In May, Time Warner Cable said it would separate from parent
. Prior to the spinoff, Time Warner Cable will declare a one-time dividend of $10.27 to all shareholders. With an ownership stake of 85.2%, Time Warner is set to receive $9.25 billion of the total $10.9 billion payout