Mixed Q1 For Time Warner Cable

OIBDA Growth In Line, But Video Sub Losses Rise

Time Warner Cable kicked off the 2013 cable earnings season with mixed results, growing revenue by 6.6% and cash flow by 2% but losing 119,000 video subscribers as customers left the second largest MSO in the country after promotional-period offers rolled off.

Time Warner Cable reported $5.5 billion in total revenue for the period, up from $5.1 billion in the prior year. Operating income before depreciation and amortization (OIBDA) was $1.9 billion in the period, up from $1.87 billion a year ago.

The revenue gains were also impacted by two extra months of Insight Communications results – TWC purchased Insight in February 2012 for $3 billion. According to TWC, excluding the Insight results, the organic revenue was $5.3 billion, up 3.1% from the previous year.

Video subscriber losses of 119,000 were above the 94,000 shed in 2011 and analysts’ consensus estimates of 91,000 losses.

Time Warner Cable added 131,000 high-speed data customers in the period and lost about 35,000 residential telephone customers.

Once again the brightest spot on the balance sheet was commercial services.

 “Business services continues to perform very well, generating 25% year-over-year revenue growth, and is on track for another terrific year,” TWC chairman and CEO Glenn Britt said in a statement. “In residential services, we’re executing on our revitalization plans to build a fundamentally stronger and more agile operation. As a result, I remain very excited about the long-term prospects for this business.”

Analysts were slightly disappointed in the miss on video subscribers, which they attributed to the implementation of a $3 per month modem fee and the expiration of aggressive promotional discounts in the period. However, they were encouraged by in-line OIBDA gains and lower than expected programming cost increases (7.7% for the period, versus expectations of about 12%).

TWC shares were down 2% ($1.91 each) to $90.82 per share in early trading Thursday.