Time Warner Cable Q1 Results In Line


Time Warner Cable kicked off the cable operator earnings season with first quarter results that were largely in line with analysts' expectations, with gains in high-speed Internet and phone customers driving growth.
Revenue was up about 5% in the period to $4.8 billion and adjusted operating income before depreciation and amortization rose nearly 4% to $1.7 billion. Time Warner Cable added about 189,000 residential high-speed data customers and 84,000 residential phone customers. Although the second largest MSO in the country lost about 65,000 basic video customers, it was less than half the 141,000 lost in the fourth quarter and nearly spot-on with analysts' consensus estimates of about 60,000 losses in the period.
Chief operating officer Rob Marcus said on conference call with analysts that video subscriber trends are improving - the MSO added customers in March - and the losses were mostly skewed toward lower-end analog only subscribers. Marcus also provided some insight into two newer offerings - its high-end Signature Home service and its lower-end TV Essentials package. Marcus said that so far, there are about 10,000 Signature Home customers paying on average of $210 per month. About 70% of Signature Home customers are existing triple play customers that have upgraded, paying Time Warner Cable an additional $20 per month.
TV Essentials, which has only been launched in two markets, is proving to be an effective targeted acquisition and retention tool, although he did not release customer numbers.
Chairman and CEO Glenn Britt also touched briefly on reports that Charter Communications is considering putting its Los Angeles market on the auction block. Britt wouldn't comment on Charter directly, but said Time Warner Cable would treat that opportunity like any other.
"We're going to evaluate it like we look at all acquisitions and look at what it would look like under our ownership and apply or cost of capital to it and all the synergies and what have you, and evaluate it versus other investment alternatives such as buying our shares back," Britt said. "We'll come out wherever we come out."