Data, phone adds drive Time Warner Cable's Q2 profit
Time Warner Cable was able to post higher second-quarter earnings this morning due to the addition of more phone and data customers, as well as increased ad revenues, but it did see its video subscriber numbers decline.
Time Warner Cable's net income rose to $342 million, or 95 cents per share, from $316 million, or 89 cents per share, in the same quarter a year ago. The company's revenue increased 5.8 percent to $4.73 billion from $4.47 billion. According to a Thomson Reuters survey, analysts on average had forecast a net income of 93 cents per share on revenue of $4.68 billion.
"I'm very pleased with our performance in the second quarter, highlighted by accelerated revenue growth in our advertising and commercial businesses, steady revenue increases in our residential subscription operations and particularly strong free cash flow growth," Time Warner Cable CEO Glen Britt said. "Through our consistent focus on the fundamentals – better understanding our customers' needs and improving the efficiency of our operations – we continue to deliver attractive financial results and create value for our shareholders."
Time Warner Cable's free cash declined 14 percent to $571 million. Time Warner Cable has been spending more money on its DOCSIS 3.0 rollouts this year, as well as planning for additional switched digital video deployments.
The nation's second-largest cable operator added 85,000 residential data customers for the quarter that ended June 30 and 63,000 home phone customers.
Time Warner Cable's Internet revenue increased by 9.7 percent to $1.23 billion, while phone revenue rose by 7.2 percent to $505 million. Data subscribers paid an average of $42.88 per month, which was a 3.3 increase, but phone subscribers paid $38.64, which was down slightly.
Time Warner Cable ended the second quarter with 9.2 million residential data subscribers and 4.3 million residential phone customers.
On the video side, Time Warner Cable followed the trend of seasonal declines in video customers with its loss of 111,000 subscribers.
Despite the loss of video subscribers, Time Warner Cable's video revenues increased slightly from $2.7 billion in the same quarter a year ago to $2.78 billion, thanks to 50,000 more digital video subscribers, higher rates, increased DVR rentals and more video-on-demand sales.
On average, Time Warner Cable's video customers paid $72.56 per month, which was a 5.2 percent increase from a year ago. The cable operator finished the second quarter with 12.7 million video subscribers.
On the advertising front, Time Warner Cable's revenues increased by 24 percent to $216 million with increases across all categories, but most significantly from automotive and political ad spending.
Time Warner Cable's commercial subscription revenues increased 20 percent due to increases in data subscriber, cellular backhaul and metro Ethernet revenues.