Time Warner Cable shines in second quarter earnings report
Overall, Time Warner reported that its quarterly profit increased 5.2 percent, thanks in large part to more digital cable, Internet and voice customers from Time Warner Cable.
"I'm pleased with Time Warner's solid results for the quarter. Our performance over the first half of 2007 keeps us firmly on track to achieve all of the company's full-year financial objectives, Time Warner chairman and CEO Dick Parsons said, in a prepared statement. “Driving this quarter's profits were gains at our cable, publishing and networks segments. Most importantly, our earnings per share delivered double-digit growth, benefiting from our recently completed stock repurchase program."
Time Warner Cable, which was partially spun off as a separate stock earlier this year, saw its revenue increase 59 percent to $4 billion, largely due to the divvying up of former Adelphia systems with Comcast.
Time Warner Cable’s subscription revenues increased 59 percent, or $1.4 billion, to $3.8 billion, led by a 59 percent growth in video revenues, a 54 percent increase in high-speed data revenues and a 75 percent increase in voice revenues. Operating income in cable rose 31 percent to $711 million while net income dropped 8 percent to $272 million.
As of June 30, Time Warner Cable served approximately 13.4 million basic video subscribers, but those subscribers decreased by 57,000 in the quarter primarily due to the Adelphia transactions.
At the end of the quarter, nearly 6.7 million customers, or 45 percent of Time Warner Cable's 14.7 million customer relationships, subscribed to two or more of the company’s triple play services, reflecting net additions of 184,000 during the quarter.
Triple play subscribers totaled 1.9 million, or 13 percent of customer relationships, for net additions of 186,000 during the quarter.
Currently, Time Warner Cable has a 58 percent digital video penetration rate with a total of 7.7 million digital subscribers at the end of the quarter. Digital video net additions were 184,000 during the quarter.
On the data side, Time Warner Cable had 7.2 million residential high-speed subscribers, reflecting 28 percent penetration of service-ready homes passed, while residential high-speed data net additions totaled 188,000 during the quarter.
Digital phone subscribers at the end of the quarter numbered 2.3 million, representing a 12 percent penetration rate of homes passed. Digital phone net additions were 241,000 during the quarter.
Time Warner broke out the increases for the triple play services by legacy systems and by acquired systems.
Time Warner said its board has approved the buyback of $5 billion of its stock, after completing a previous buyback worth about $20 billion.