Time Warner Cable’s second-quarter earnings rose 6 percent, helped by higher revenue from business services and residential broadband.

The big question surrounding TWC has nothing to do with quarterly performance; it is whether TWC would be involved in any industry consolidation. Following Liberty Global’s investment in Charter Communications, rumors have swirled about potential deals that might include some combination of TWC, Charter, Cablevision, or even other, somewhat smaller properties, including Media One.

CEO Glenn Britt, who just announced his pending retirement, noted the rumors during the company’s conference call with investors. He said that consolidation is a “worthwhile endeavor,” but he avoided providing any information on the subject whatsoever.

During the quarter, revenues increased, but the company had a net loss of both basic video (191,000) and phone customers (56,000), which Rob Marcus, currently president and COO and designated successor to Britt, said investors should have expected.

The company has been deliberately targeting customers who provide “higher ARPU, higher profit and lower churn, even if that means fewer connects.” It should be no surprise, then, he said, that the company had a net loss of customers in the quarter.

The company added a net of 8,000 broadband customers in the quarter. High speed data (HSD) revenue was up more than 12 percent, largely because of ARPU increases, largely due to price increases, Marcus explained.

Revenue was up in broadband, but down a combined 4 percent in video and phone. The company ended the quarter with 11.7 million video customers, and closer to 5 million VoIP subscribers. Overall ARPU was up $1.29 since the last quarter, and $3.80 from a year ago.

Marcus noted subscriber losses were higher in the Midwest – the former Insight operations – where AT&T has been aggressively promoting U-verse. He said TWC might change its pricing strategy to be more competitive in those markets. Marcus noted that in those markets where TWC competes with Verizon FiOS, TWC has recently experienced fewer losses.

The company said business services had a particularly good quarter.

Asked about Wi-Fi and TWC's wireless strategy, Marcus said the company's focus had been in Los Angeles, and that recently it has been adding hotspots in New York City -- all as a value-add for broadband customers, but as for a wireless strategy, the company is currently comfortable with its reselling partnership with Verizon Wireless.

Marcus was asked if anyone had been designated his successor as president. Marcus did not provide a direct answer, but instead noted that the company recently reorganized and named three COOs, one each for its three new operating groups.

In January the company reorganized, naming Bill Goetz EVP and COO of residential services, Phil Meeks as EVP and COO of business services, and Joan Gillman EVP and CEO of media services. 

Capital expenditures were up by over $100 million from the second quarter the prior year, to $827 million.

Responding to a question about CPE, Marcus made it clear that no decisions have been made, but the company would continue to work with alternate boxes such as Roku and Samsung smart TVs, and he speculated that someday CPE might be a customer purchase.

The company’s adjusted earnings surpassed Wall Street's expectations and shares rose more than 3 percent in morning trading.

Time Warner Cable earned $481 million, or $1.64 per share, in the April-June period. That's up from $452 million, or $1.43 per share, in the same period a year earlier. Adjusted earnings were $1.69 per share in the latest quarter, up from $1.48 per share in the year-ago period.

Revenue grew 3 percent to $5.55 billion from $5.4 billion.

Analysts, on average, had expected earnings of $1.65 per share on revenue of $5.58 billion, according to a poll by FactSet. Analysts typically focus on adjusted earnings figures.

The number of Time Warner's business subscribers increased during the quarter, but it wasn't enough to make up for the decline in total customers from the prior quarter. The company lost 80,000 net customers in the April-June quarter, ending with 15.2 million from 15.3 million as of the end of March.

The Associated Press contributed to this report