Time Warner Expected to Keep Up

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Time Warner Inc. will step up to the quarterly earnings plate this week and the nation's second-largest cable operator is expected to increase its growth pace with advanced services.

With Time Warner scheduled to report third-quarter earnings on Nov. 1, Merrill Lynch media analyst Jessica Reif Cohen estimates that its Time Warner Cable division will add about 282,000 high-speed Internet customers (above the 230,000 added in the second quarter) and 275,000 voice customers, above the 234,000 added in the second quarter.

Reif Cohen also predicts that strong basic-subscriber growth will continue, with 30,000 basic customers added in the quarter, up from the 18,000 added in the previous quarter.

Factoring in the recent addition of Adelphia Communications systems into the mix — Time Warner's joint purchase of Adelphia with Comcast closed on July 31 — Reif Cohen expects cable revenue to rise 33% to $3.2 billion and cash flow to increase by 27% to $1.2 billion. Excluding the Adelphia systems, revenue at the cable unit should increase 15% and cash flow should rise 13%, according to Reif Cohen.

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