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Time Warner Cable bleeds more video subs; data boosts Q2

Thu, 07/28/2011 - 8:50am
Mike Robuck

In a continuing trend for cable operators in general and Time Warner Cable in particular, Time Warner Cable lost 130,000 video customers in the second quarter, but increases in broadband subscribers and business services revenues boosted the company's profits.

The nation's second-largest cable operator saw its second-quarter revenue increase 4.4 percent over the same quarter a year ago to $4.94 billion. The $4.94 billion was on the money with FactSet analysts' projections, but the loss of 130,000 video subscribers exceeded some analysts' estimate of 120,000. In the second quarter of last year, Time Warner Cable lost 111,000 video subscribers.

Time Warner Cable posted a profit of $420 million in the second quarter compared to $342 million a year ago. Residential services revenues grew 2.5 percent year-over-year to $4.3 billion, business services revenues increased 35 percent to $361 million, advertising revenues grew 4.2 percent to $225 million and other revenues increased 5.5 percent to $58 million.

Time Warner Cable's spike in business services revenue was due to an increase in cell tower backhaul revenues and the closing of the NaviSite deal. Cloud-based service provider NaviSite contributed $26 million of revenue in the second quarter.

Residential video revenues for the quarter were down 0.1 percent, while high-speed data increased 8.5 percent and voice 4.4 percent. Time Warner Cable added 54,000 data customers and 32,000 phone subscribers in the second quarter.

"Time Warner Cable continued to perform well in the second quarter, driven by very strong results in business services and higher residential ARPU," said Time Warner Cable CEO Glenn Britt. "We also continued to generate strong free cash flow while still investing in our core business, allowing us to return more than $1 billion to our shareholders."

In addition to returning more than $1 billion to shareholders in the quarter, Time Warner Cable purchased $863 million in stock during that time frame, with about $1.8 billion available for share repurchase as of June 30.

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