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Cable Technology Feature Article

January 27, 2012

Time Warner Cable Adds to Resources to Repurchase Company Shares, Raises Quarterly Dividend

By Ed Silverstein, TMCnet Contributor

Time Warner (News - Alert) Cable has added to its resources to repurchase shares so the company’s board can now authorize up to $4 billion of repurchases. This compares to Time Warner Cable returning about $3.3 billion to shareholders during 2011 via buybacks or dividends, according to news reports.

Market conditions and other influences will determine how many shares will be repurchased in the coming months.

The new announcement shows the company’s “confidence,” according to a company statement. “It reinforces our focus on returning capital to our shareholders while we continue to invest in the long-term growth of our business,” Time Warner Cable CEO Glenn Britt said in the statement.

The company also increased its quarterly dividend by 17 percent to 56 cents a share. The next quarterly dividend is payable on March 15.

In a related matter, Variety reported that Britt described the residential market "increasingly bifurcated." Some consumers are “price conscious” and others want “top-tier service.” He also said in a conference call about earnings that “pressure” exists from Verizon (News - Alert) and AT&T but it is "manageable," Variety reported.

According to news reports, Time Warner Cable's net profit increased to $564 million during the most recent quarter compared to $392 million during the same quarter taking place in the prior year. Quarterly revenue edged up about four percent to $5 billion, Variety adds. In a related matter, business services revenues increased during the recent quarter by 37.2 percent to $409 million. Revenues from advertising dropped 10 percent to $242 million.

On the other hand, revenues for all of last year increased 4.3 percent from 2010 to $19.7 billion. Business services revenues for 2011 increased 32.7 percent from 2010 to $1.5 billion. Growth in revenues from residential services came largely from high-speed data and voice, according to a company statement.

In commenting about recent results, Britt said in the statement, “Time Warner Cable’s 2011 results demonstrate the continued strength of our business amidst rapid change in technology and the consumer marketplace.”

“We have a full slate of strategic and operational initiatives planned for the year ahead, all designed to generate strong cash flow, enable future growth and provide attractive returns to our shareholders,” he added.

In other recent company news, after a recent deal with HBO GO, Time Warner Cable will begin to stream the service, TMCnet reported.

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Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

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