Time Warner Cable adds more subscribers, but earnings slip
Time Warner Cable (TWC), the No. 2 U.S. cable TV operator, reported a 3.5 percent rise in revenue as it added more residential video and high-speed data subscribers than expected.
Time Warner Cable added a net 30,000 residential video customers in the first quarter ended March 31, more than double the 11,800 market research firm Factset StreetAccount had estimated.
The cable TV operator has been losing residential video subscribers since it started breaking out numbers for residential and commercial video subscribers since the fourth quarter of 2010.
“Under Dinni Jain, Time Warner Cable is going for unit growth with aggressive promotions,” Evercore ISI analysts wrote in a note.
The company has been bundling its video, Internet and land phone services to attract customers, who are switching to video streaming services offered by companies such as Netflix Inc.
Time Warner’s triple-play bundling strategy appears to be paying dividends, MoffettNathanson LLC analyst Craig Moffett said.
Comcast (CMCSA) abandoned its $45 billion offer to buy Time Warner Cable last week after U.S. regulators raised concerns that the deal would give Comcast an unfair advantage in the cable TV and Internet-based services market.
Reuters reported on Monday, citing people familiar with the matter, that Time Warner Cable was open to merger discussions with Charter Communications(CHTR).
“Time Warner Cable is unmistakably investing for growth. And that has to raise questions about whether they would be willing to sell to Charter after all,” Moffett said.
“Typically, a company want to sell when they reap, not when they sow,” he said.
Net income attributable to Time Warner Cable’s common shareholders fell to $458 million, or $1.59 per share, in the quarter ended March 31, from $479 million, or $1.70 per share, a year earlier.
Revenue rose to $5.78 billion from $5.58 billion.
Analysts on average had expected earnings of $1.87 per share on revenue of $5.83 billion, according to Thomson Reuters I/B/E/S.