Time Warner Cable Adds 21,000 Video Subs, Charter 15,000 in First Quarter
TWC reports its highest first-quarter revenue growth in eight years just days after its sale to Charter was approved by the Department of Justice.
Time Warner Cable early on Thursday reported better-than-expected first-quarter earnings and said it continued to add pay TV subscribers in the period, a feat later in the morning repeated by future owner Charter Communications.
Time Warner Cable, whose sale to Charter has been approved by the Department of Justice and the chairman of the FCC with conditions, had reached full-year residential video subscriber growth in 2015, its first year of growth since 2006.
TWC, led by chairman and CEO Rob Marcus, added 21,000 residential pay TV subscribers in the first quarter and kept business service video subscribers unchanged at 214,000. It ended the quarter with 10.84 million residential video subscribers. Overall, it recorded 236,000 residential customer relationship net additions for the quarter, including 314,000 net new broadband users. The company said that meant its best-ever customer relationship net additions.
Charter, led by CEO Tom Rutledge, added 15,000 net video subscribers, 10,000 at its residential business and 5,000 at its small and medium business unit. In the year-ago period, the company had lost 12,000 video subs.
As of March 31, Charter served 6.8 million overall customers, including more than 4.33 million residential video subscribers.
Big cable operators have seen improved subscriber momentum, while telecom and satellite TV firms have seen weaker trends.
TWC on Thursday reported adjusted quarterly earnings of $518 million, or $1.81 per share, compared with $474 million, or $1.65 a share, in the year-ago period. In dollar terms, that was a 9.3 percent increase.
Revenue rose 7.2 percent to $6.19 billion. The company said that was its "highest first-quarter organic revenue growth in the last eight years, driven by accelerated growth in residential services and strong growth in business services."
"Our first-quarter results are the clearest indication yet that our efforts over the last 27 months are paying off," said Marcus. "We have made our network more reliable, our products more compelling and our customer service far better. We’ve refined our marketing, enhanced our sales channels and strengthened our retention capability. All of that has driven robust customer growth.”
Charter grew its first-quarter revenue 7.1 percent to $2.53 billion. But amid higher costs and expenses, its quarterly loss widened from $81 million to $188 million. "The year-over-year increase in net loss was primarily related to a $165 million increase in interest expense, driven by the financing of Charter's pending transactions with Time Warner Cable Inc. and Bright House Networks," the company said.
Said Rutledge: "Our products, service, customer growth and financial results continue to improve, as we deliver more value to our residential and business customers. The operating, service and financial benefits of our strategies are as we expected and demonstrate the growth opportunity that our consumer-friendly practices can drive on a larger set of underpenetrated assets through our pending transactions with Time Warner Cable and Bright House Networks."