Cable Technology Feature Article
Time Warner Cable Q2 Earnings Beat Estimates Despite Customer Losses
By Tracey E. Schelmetic, TMCnet Contributor
Despite news yesterday that the nation's pay television providers are bleeding customers, the news isn't all bad for some. Time Warner (News - Alert) Cable, Inc. is actually reporting second-quarter profits this week that beat analysts’ estimates.
The better-than-expected results are attributed to the company's gain of broadband Internet subscribers.
Time Warner, the nation's second largest cable company, is reporting this week that net income jumped to $452 million, or $1.43 per share, from $420 million, or $1.24, a year earlier. Excluding one-time items, earnings per share were $1.48.
Analysts projected $1.38, the average of estimates compiled by Bloomberg.
Time Warner Cable has been successful in offering its Internet product as both a stand-alone service and in a bundle with cable TV and phone. The company added 59,000 residential broadband subscribers, while AT&T (News - Alert) lost 96,000 subscribers and Verizon Communications, Inc. (VZ) gained 2,000, Bloomberg said.
“Time Warner Cable results were solid, with better-than- expected profitability as costs were kept in check, but slightly weaker subscriber performance,” James Ratcliffe, a New York- based analyst at Barclays Capital Inc., said in a note to clients.
Yesterday, it was reported that for a variety of reasons, many of them related to the poor economy, Americans are ditching their pay television service in droves. About 169,000 subscribers got rid of Time Warner's services in the last quarter alone, leading to the service provider’s 10th consecutive quarter of customer losses.
About 52,000 net subscribers have dropped DirecTV during the past quarter, and Comcast (News - Alert) shed about 176,000 customers.
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Edited by Braden Becker