Time Warner Cable Posts Smallest Third-Quarter Video Sub Loss Since 2006
"Cable Strikes Back," analyst Craig Moffett writes in a report that lauded the company's and Charter's better-than-expected pay TV sub trends. "Time to change the narrative about cord-cutting."
Time Warner Cable on Thursday reported its third-quarter earnings as well as narrowed video subscriber losses that at least one analyst immediately lauded in a bullish note.
The company, which has agreed to be acquired by Charter Communications, had posted its first quarterly video sub growth since 2009 in the first quarter of the year.
The cable operator, led by chairman and CEO Rob Marcus, on Thursday reported earnings of $5,922 million, compared with $5,714 million in the year-ago period.
TWC lost 7,000 residential pay TV subscribers in the latest quarter after losing 184,000 in the year-ago period. It said the third-quarter video subscriber performance was its best since 2006.
Net income attributable to TWC shareholders was $437 million for the quarter, compared to $499 million a year ago. The company attributed the decline primarily due to a "decrease in operating income, partially offset by a decrease in income tax provision."
Marcus on the earnings conference call reiterated past comments that the strong quarter means that Time Warner Cable could end the year with a net gain in pay TV subscribers. “We’re the first to acknowledge that we have a long way to go," he said, but also emphasized: "The strides have been significant."
MoffettNathanson analyst Craig Moffett in a report entitled "Cable Strikes Back" suggested that it was "time to change the narrative about cord-cutting," citing the better-than-expected results at Time Warner Cable and also Charter Communications. He also noted that cable giant Comcast previously reported a loss of 48,000 video subscribers in the latest quarter, down from a 81,000 drop in the year-ago period.
"The pay TV industry is slowly drip, drip, drip declining (last quarter the decline rate was 0.7 percent, and this quarter looks like it will probably be about the same)," he wrote. "That cable was actually holding its own was at best a secondary narrative. Perhaps cable’s video strength should be the story’s lead. Each of Comcast, TWC and now Charter have blown away expectations for video subscriber losses ... All three are now outperforming pay TV as a whole. Cable is taking share."