Time Warner Cable reports fewer net subscribers than analysts expected
New York —
Time Warner Cable added 131,000 residential Internet users, missing the average analyst estimate of 160,000. Video customers declined by 119,000 in the period, more than the 92,000 loss projected by 12 analysts on average.
The New York-based cable provider has lost video customers for 16 consecutive quarters, dating back to 2009, as consumers switch to rival services such as Verizon Communications Inc.’s FiOS or online products such as Netflix Inc. Time Warner Cable also has been less aggressive with promotions and discounts, causing some budget-minded customers to leave.
“Time Warner Cable reported a disappointing first quarter against a backdrop of low market expectations for both financial and subscriber results,” Bryan Kraft, an analyst at Evercore Partners Inc. in New York, said in a note to clients. “Management had warned about the impact of promotional subscriber roll-offs having an unusually large impact on churn this quarter.”
Time Warner Cable fell as low as $89 in premarket trading after the results were released. The stock, down 4.6 percent this year, closed at $92.73 yesterday in New York.
Verizon’s FiOS, meanwhile, added 188,000 broadband customers and 169,000 TV subscribers last quarter. FiOS and Time Warner Cable have overlapping coverage in a number of cities, including New York and Los Angeles.
Even with disappointing subscriber numbers, Time Warner Cable boosted profit. Excluding one-time costs, earnings were $1.41 a share, beating the $1.37 average analyst estimate compiled by Bloomberg. Net income rose to $401 million, or $1.34 a share, from $382 million, or $1.20 a share, a year earlier, the company said in a statement.
Sales rose 6.6 percent to $5.48 billion, compared with the $5.49 billion average analyst estimate. Business services rose 25 percent to $537 million.
Time Warner Cable repurchased shares for $660 million in the quarter, compared with the previous period’s $571 million.
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