Cable Technology Feature Article
November 05, 2008
Time Warner Cable 3Q Profit
By Jessica Kostek, TMCnet Channel Editor
Time Warner (News - Alert) Cable Inc has announced a higher-than-expected third-quarter profit given to them by phone and Internet sales, but said they’ve seen a notable slowdown in subscriber growth in the fourth quarter. Even though Time Warner has seen an increase in profit, the company is continuing to be cautions.
“If people continue to lose their homes and jobs, it would be naive to assume that there would be no impact on our business, and in fact, as we moved into the fourth quarter, we saw a significant slowdown in subscriber growth compared to last year, particularly for our video and voice services," Chief Executive Glenn Britt said on a conference call.
"In addition, we've experienced a slowdown in some of our premium video services, including pay per view, paid TV services and DVRs," he said.
Shares of Time Warner Cable fell 1.3 percent to $20.29 and remain down a third from their May high of $31.56.
The company said net profit rose to $301 million, or 31 cents a share, from $248 million, or 25 cents a share, a year earlier.
Revenue rose 8 percent to $4.3 billion, in line with Wall Street expectations.
Bernstein forecast basic video subscriber losses at 53,000 and additions of 175,000 digital video subscribers.
"As with Comcast (News - Alert) the results show the limited volatility of the cable business model, even in difficult consumer economic conditions," Barclays Capital analyst Vijay Jayant and James Ratcliffe stated in an analyst report.
According to Reuters (News - Alert), Time Warner Inc. said in May it would spin off the cable unit and pay a one-time dividend of about $10.9 billion to both companies' shareholders. Time Warner Inc. owns 84 percent of Time Warner Cable.
The separation is expected to take place by the end of the year or in early January.
Jessica Kostek is a channel editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Jessica’s articles, please visit her columnist page.
Edited by Jessica Kostek