Time Warner Cable Downloads Mixed Q3 Results

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Time Warner Cable kicked off the third-quarter earnings season Thursday morning with mixed results, as high-speed data revenue and subscribers continued to perform well, but basic video and phone performance was below some analysts' expectations.

Total revenue for the second-largest MSO in the country was up about 4% to $4.91 billion, slightly below consensus estimates of $4.95 billion. Adjusted operating income before depreciation and amortization was also up 4% to $1.8 billion. While high-speed data and business services revenue continued to rise, up by 8% and 35%, respectively, basic video and phone fell below estimates. Time Warner Cable lost 128,000 basic video customers in the period (compared to the 155,000 it lost in the same period last year) and phone customers declined by 8,000, its weakest performance since VoIP service was introduced. High-speed data customers increased by 89,000 in the period, slightly below consensus estimates of 98,000.

In a research note earl/y Thursday, ISI Group cable and satellite analyst Vijay Jayant wrote that results were "nothing better than OK and might leave some with a little to be desired," adding that the stock may have to brace for a wild ride his morning as investors let those results sink in.
"To the extent the latter view prevails today, we would view any weakness in TWC's share price as a buying opportunity, as 4Q trends seem poised to beat expectations," Jayant wrote.
Time Warner Cable executives are scheduled to speak with analysts this morning on a conference call at 8:30 a.m.

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