The No. 2 cable operator just stepped up its effort to resist Charter Communication’s $61.3B (including debt) takeover offer by raising the quarterly dividend by 15% to 75 cents a share — and reporting Q4 earnings that appear to top analyst forecasts, even with weak results for video. “We are geared up to manage this company for the long haul,” CEO Rob Marcus says. TWC’s net income of $540M is up 5.1% vs the Q4 number in 2012, on revenues of $5.58B, +1.7%. The revenue number is just slightly ahead of the $5.56B that the Street anticipated. Earnings per share at $1.89 topped predictions for $1.73. TWC says that revenue per customer grew 2.2% to $106.03 with big gains in its broadband service where the number was up 12.4% to $46.21. Revenues for the Internet business rose 13.7% to $1.53B. But that had to offset the continuing decline in video, which continued to be hurt by last summer’s month-long dispute with CBS. TWC lost 217,000 TV subscribers, bringing its total down to 11.2M. In addition, the unit lost about $15M due to subscriber credits for Showtime customers who lost the channel during the CBS fight, along with lower VOD sales. Revenues for video fell 5.6% to $2.69B. Programming costs rose 7.7% vs the period last year to $33.70 per month for each subscriber.
In slides prepared for a conference call with analysts … Read More »
The financials are probably just anemic enough to help Time Warner Cable‘s case that it has to hold the line on rising programming costs, but without sending investors running. The No. 2 cable company generated $481M in net income in Q2, +6.4% vs the period last year, on revenues of $5.55B, +2.7%. Analysts expected revenues to be a tad higher, at $5.58B. But adjusted earnings at $1.69 a share beat the consensus forecast for $1.65. The core residential video business weighed down the numbers: TWC ended the quarter with 11.7M video subs, down 191,000 vs the previous quarter. Revenues for the unit fell 4.4% to $2.67B. Meanwhile the average monthly programming costs per sub increased 8.5% from the period last year to $33.54. That was largely driven by network rate increases and the addition of new networks, the company says. (It’s engaged in a bitter negotiation with CBS which wants TWC to pay higher prices for its stations and cable networks.) As with most cable companies, the high-speed Internet business helped to pick up the slack. Revenues for the residential service rose 12.5% to $1.42B as TWC raised the price of equipment rentals and added 8,000 subscribers for a total of 11.1M. With advancements in its business services, CEO Glenn Britt says that he is “pleased with our progress in operations and expect to see the benefits in the second half of the year … Read More »
The stock is down about 3.3% in pre-market trading, possibly because the growth in residential broadband subscriptions was lower than some anticipated. Time Warner Cable reported net income for Q4 of $514M, -8.9% vs the same period last year, on revenues of $5.49B, +9.9%. Revenues were just a hair below the Street’s forecast for $5.50B. But adjusted earnings of $1.57 a share beat expectations for $1.55. Factoring out systems acquisitions last year, including, Insight Communications, Time Warner Cable’s revenues from residential video services fell 3.1% to $2.55B. The total number of residential video subscribers fell 129,000 to 12.03M. The company says that its video programming expenses per subscriber increased 5.1% vs the end of 2011 to $31.28 a month which was “primarily driven by contractual rate increases and the carriage of new networks, partially offset by a decline in transactional video-on-demand costs.” Revenues from residential Internet services were up 11.4% to $1.28B as the total number of subscribers grew 75,000 to 10.94M. “In the year ahead, we plan to focus on operational excellence as we invest to capture long-term opportunities and drive profitable growth,” CEO Glenn Britt says.
The report for this quarter is more complicated than usual due to the acquisition in February of Insight Communications. Still, many investors should find the numbers reassuring — even if they prefer yesterday’s cable system results from Comcast. The No. 2 cable operator generated $453M in net income, +7.6% vs last year’s Q2, on revenues of $5.4B, +9.3%. The revenue figure is nearly bulls-eye with the Street’s expectations. And earnings, at $1.43 a share, exceeded forecasts of $1.39. Factoring out Insight, Time Warner Cable’s residential video business was down 1% to $2.6B. The total number of video subscribers fell 169,000 — more than many analysts forecast — to 12.5M. The drop “is a bit disappointing, especially as it appears that a substantial number of video losses came from double play subs, not just single plays,” Credit Suisse analyst Stefan Anninger says. But the company says that the drop in payments for subscriptions, premium channels, and VOD was partially offset by price hikes, better sales of higher-priced tiers, and higher revenues from equipment rentals. As with most cable companies these days, broadband was the star of the show. The number of Internet subs increased 59,000 to 10.7M while revenues, not including Insight, were up 7.2% to $1.2B — also helped by price increases. CEO Glenn Britt’s brief comment in the report added little insight into the numbers or his plans. He noted that the company “benefited from continued strong performance … Read More »
UPDATE, 9:25 AM: Time Warner Cable’s shares are off 6.9% at midday — even as the overall market is rallying on an encouraging economic report and news of a deal to help resolve Greece’s debt crisis. Comcast and Cablevision also are down about 2.9%. Credit Suisse analyst Stefan Anninger says he was “surprised” by the drop in phone cutomers at TWC and wonders whether many chose to cut the cord and rely on wireless phones. But Wells Fargo’s Marci Ryvicker says that the problems at TWC probably won’t be seen at Comcast which “is likely to once again show significant outperformance versus its peers” — and may benefit as analysts lower their expectations. Meanwhile, Bernstein Research’s Craig Moffett warns that the drop in TWC video customers is a bad sign for satellite companies: “As pure-play video providers, profitability is unsustainable when their direct competitors, the cable (operators), are experiencing video falling margins.” DirecTV and Dish Network shares are down less than 1%.
PREVIOUS, 4:34 AM: The No. 2 cable operator reported net income of $356M, down 1.1% vs the same period last year, on revenues of $4.9B, up 3.7%. Earnings came in at $1.09 a share, missing the $1.14 that analysts expected. They also thought revenues would be slightly higher at $4.95B. The miss came as Time Warner Cable lost 128,000 residential video customers, ending the quarter with 11.9M. The company says that the drop in subs as … Read More »
The economy is weak, but you wouldn’t know it from Time Warner Cable’s 2Q earnings. The No. 2 cable operator reports net income of $420M on revenues of $4.9B, up 4.4% vs the same period last year. Earnings, at $1.24 a share, zoomed past the $1.16 that analysts expected. The company attributes the increase to strong sales of business and residential phone and broadband services. The core home pay TV business didn’t help, though: Time Warner Cable lost 130,000 subscribers in the quarter ending up with 12.1M. It also says that sales for VOD and premium channels were down. Revenues for residential video, at $2.68B, only fell 0.1% due to a price hike and company efforts to upsell customers to higher-priced service tiers. While that may worry investors, they may be more impressed by the fact that Time Warner Cable returned $1B to them in the quarter — $863M from share repurchases and $163M from a dividend. The company is authorized to buy back an additional $1.8B in stock.