Time Warner Cable Third-Quarter Earnings, Revenue Rise
UPDATED: The company, led by CEO Glenn Britt, reports higher political advertising revenue, but it continues to lose pay TV subscribers.
Cable giant Time Warner Cable on Monday reported improved third-quarter financials driven by continued broadband subscriber growth, higher political advertising revenue and a recent acquisition. But excluding one-time items, the latest earnings came in below analysts' expectations.
On a conference call with Wall Street folks, Time Warner Cable president and CEO Glenn Britt said that Hurricane Sandy left "some damage" to the cable company's facilities, vehicles and outdoor plant, especially in New York City. Management is currently evaluating the damage and insurance coverage, but Britt said the financial fallout will not be "very significant."
Describing broader market trends, the CEO said the economy continues to "bounce along" in sluggish territory, "and we have intense competition, especially here in New York City."
The company's third-quarter adjusted earnings increased 19.7 percent to $438 million. Operating profit climbed 9.2 percent to $1.09 billion. Excluding certain one-time benefits such as from the sale of wireless spectrum, a $15 million increase in pension expense and higher merger-related and restructuring costs left the bottom line below Wall Street expectations though.
Revenue also rose 9.2 percent to $5.4 billion, including a 22.2 percent increase in ad revenue to $264 million driven by the U.S. elections on Tuesday.
TWC, the second-largest U.S. cable operator, lost 140,000 pay TV subscribers in the latest quarter to end September with 12.16 million. In the year-ago period, it had lost 126,000 video subscribers. But the company signed up 98,000 new broadband Internet customers, compared with 105,000 in the year-ago period, and 14,000 telephony users, compared with 5,000 in the year-ago quarter.
“Our third-quarter results were good, with most trends similar to the preceding quarter," said Britt. "Our operating results were driven by continued strong performance in residential high-speed data and business services, an acceleration in high-margin political advertising and the contributions from our [acquired] Insight systems."