Time Warner Cable CEO Declines to Comment on "Any M&A," Touts Operating Momentum

Courtesy of Time Warner Cable

Rob Marcus tells the cable giant's first-quarter earnings conference call his team will do what's best for shareholders amid expectations of talks with Charter.

Time Warner Cable CEO Rob Marcus on Thursday focused his comments on the company's first-quarter earnings conference call on the cable giant's improved operating performance rather than latest deal talk following the failed combination with Comcast.

Investors and Wall Street observers have been wondering what the company would do after its planned sale to the largest U.S. cable operator was abandoned amid regulatory opposition, with many predicting initial deal talks with Charter Communications would start soon.

Only during the Q&A portion, did the CEO face an analyst question about possible M&A plans. "We are not really going to respond to questions about any M&A," Marcus said. "We are going to be guided by the same principles" as before in determining strategy, namely what's best for shareholders, he added, keeping the company's options open.

TW shares opened slightly lower on Thursday.

The TW Cable CEO said that while "speculation" about possible future steps, including deal conversations, "continues to grab most of the headlines," he wanted to focus his prepared remarks on the company's improved operating momentum.

"We are as well positioned for the future as any company in our industry," he said. "To be blunt, that was not the case when we entered 2014." Marcus touted "incredibly strong operating momentum," predicting "significant financial growth" going forward. 

While over the last 16 months, most people were more focused on the Comcast merger, Marcus said "we have been quietly executing on the operating plan" outlined before the Comcast deal was even announced. Marcus said he told his team last February to "be ready" in the "unlikely event" that the Comcast deal wouldn't be completed, even though he said that "we were confident that the transaction would be consummated." Concluded Marcus: "My team surpassed my wildest expectations."

Why is the company doing better? "First is customer service," the CEO said. Advance network diagnostics have helped the company notice possible disruptions early and reduce the need for customer service calls, which in turn allows reps to focus on real problems. He also touted "industry-leading" one-hour service windows, which TWC has offered, saying the company managed to stick to them in 97 percent of cases. 

"I feel great" about TWC's trajectory, Marcus said in summary. The company would be working with its board on future dividend stock buyback plans, he added. The CEO emphasized that he remains "totally committed to maximizing shareholder value."

Asked late in the call if the failed Comcast deal would affect the executive team, Marcus said that if it "could hang through" what the company just experienced, he feels the company was well positioned.

Discussing skinny pay TV packages, meaning smaller and cheaper packages for cost-conscious customers, the TWC team said the company doesn't want to be a pioneer on the issue, but would be ready to follow if consumer interest in them takes off.

Asked about the future of TV and new ways to reach younger demographics, Marcus said: "There tends to be, in my opinion, an obsessive interest in millennials, maybe at the expense of the broader customer base." He added: "For most of our customers...the way we currrently deliver the video product is pretty darn attractive." That said, he added that some customers would like to access video in different ways, and he vowed the company would continue to look at additional options.

Twitter: @georgszalai