UPDATE 3-Time Warner Cable earnings, revenue up
* First-quarter EPS 93 cents vs 60 cents year earlier
* Adds 189,000 high-speed Internet customers
* Loses 65,000 basic video customers, continuing trend (Adds analyst comment)
By Paul Thomasch
NEW YORK, April 28 (Reuters) - Time Warner Cable Inc's (TWC.N) quarterly profit rose 52 percent, fueled by a stronger advertising market and a big jump in subscriptions to its high-speed Internet service.
Time Warner Cable's success in signing up more customers to its Internet and phone services softened the blow of the continuing loss of TV customers and lifted shares 1 percent to a 52-week high.
The No. 2 U.S. cable television operator dropped 65,000 basic video customers during the first quarter, but it is hardly alone. The entire cable industry faces competition for video customers from phone and satellite providers, not to mention Internet-based upstarts such as Netflix Inc (NFLX.O) and Hulu.
Time Warner Cable has responded by expanding its presence in other areas, particularly high-speed Internet, where it added a better-than-expected 189,000 customers. Most analysts figured it would add closer to 125,000 to 165,000. Subscribers additions to its phone service also slipped by expectations at 84,000.
Chief Executive Glenn Britt said its high-speed Internet service "is quickly becoming the anchor product in the eyes of consumers," and noted the service now has more than 10 million subscribers.
In light of those sorts of numbers, analysts and investors appeared to accept the loss of more video customers, particularly in the small number of cases when customers are dropping TV subscriptions to watch video over the Web, known as cord cutting.
Craig Moffett, an analyst with Bernstein Research, said in a note that "investors have grown more comfortable with the view that cable is, first and foremost, an infrastructure play, and that its broadband business will serve as a near perfect hedge against" cord-cutting.
Time Warner Cable's first-quarter income rose to $325 million, or 93 cents a share, from $214 million, or 60 cents a share, in the same period a year ago.
Adjusted for items, including the tax impact of expired stock options, the company's earnings of $1.01 a share surpassed the average analyst estimate of 98 cents a share, according to Thomson Reuters I/B/E/S.
Revenue increased 5 percent to $4.8 billion, reflecting the solid subscriber numbers and strong advertising sales. That was largely in line with expectations.
Shares of Time Warner Cable rose 48 cents to $75.76. (Reporting by Paul Thomasch, editing by Gerald E. McCormick, Dave Zimmerman and Derek Caney)
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