First Conference Call for Time Warner Cable
Newly Public Cable Operator Posts Strong 1Q
By Mike Farrell -- Multichannel News, 5/2/2007 11:56:00 AM
In its first quarterly conference call with analysts since going public in March, Time Warner Cable reported strong first-quarter financial results driven by continued growth in high-speed-Internet and phone-subscriber additions.
Revenue at the cable unit -- which was spun off from Time Warner as a separate publicly traded company March 1 -- rose 10% to $3.85 billion and adjusted operating income before depreciation and amortization was up 12% to $1.3 billion, driven in large part by 356,000 high-speed-data additions and 234,000 additional phone customers. Digital-subscriber additions were 278,000 during the period, and the company also added 46,000 basic subscribers.
Basic-subscriber losses at its former Adelphia Communications and Comcast properties -- acquired as part of the MSO’s joint purchase of Adelphia with Comcast last year -- continued in the first quarter but showed improvement.
The acquired systems lost about 20,000 customers during the period, about 85% of those (17,000 customers) in systems in Los Angeles and Dallas. But the losses were considerably less than the 40,000 customers shed in those systems during the fourth quarter.
On a conference call with analysts, Time Warner Cable chief operating officer Landel Hobbs said the Adelphia integration, after a few early hiccups, was moving ahead.
The company completed channel-lineup changes and high-speed-data migration in the systems and billing conversions, with only two systems left to go, should be finished by May. Plant upgrades in the acquired properties should be completed by the end of the year. Hobbs also pointed out that subscriber losses in Los Angeles and Dallas during the period were one-half the 40,000 lost in the fourth quarter.
“We believe we are well on our way to stemming subscriber losses in the acquired systems by the second half of this year,” Hobbs said on the conference call, adding that other acquired properties have shown extremely strong growth.
At Time Warner’s Midwest systems, located mainly in Ohio, net basic-subscriber additions tripled in the first quarter, and in its Norwich, N.Y., system, phone penetration reached 20% of homes passed just 45 days after the product was available, he added.
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