Time Warner Cable hurt by rivals for video subs
NEW YORK (Reuters) - Time Warner Cable Inc's (TWC.N) quarterly profit topped analysts' forecasts, but its shares fell as it lost more video customers than expected due to increasing competition and the impact of the weak economy.
The U.S. No. 2 cable company lost 128,000 TV subscribers during the quarter as competition from satellite and phone companies increased.
Analysts at Collins Stewart had forecast video losses of around 115,000. Executives said they were also hurt by the ongoing weak economy, which has meant fewer new home moves.
The video losses were offset by the addition of 67,000 Internet customers and 45,000 voice customers.
Chief Executive Glenn Britt said the company views Internet services as a very important part of its future.
"As broadband becomes increasingly important to our customers, we think we can create additional value by making it available to them everywhere," Britt said.
For the second quarter, net income rose to $420 million, or $1.24 per share, compared with $342 million, or 95 cents a share a year ago.
Revenue rose 4.4 percent to $4.94 billion.
Analysts on average had expected earnings of $1.16 a share, excluding items, on revenue of $4.94 billion, according to Thomson Reuters I/B/E/S.
"The market may be over-reacting to the greater-than-expected video losses but also to the fact that they had been hoping for a share buy back announcement this quarter," said Collins Steart analyst Thomas Eagan. "We think it may come in the third quarter."
President Rob Marcus said the company was on course to meet its previously stated full-year earnings forecast of $4.25 to $4.50 per share.
Time Warner Cable shares fell 2.9 percent, or $2.26, to $74.80 in morning New York Stock Exchange trading. Comcast Corp shares (CMCSA.O) were down 40 cents at $24.26, while Cablevision Systems Corp (CVC.N) shares were off about 1 percent, or 34 cents, at $24.85.
(Reporting by Yinka Adegoke, additional reporting by Supantha Mukherjee in Bangalore; Editing by Matthew Lewis and Maureen Bavdek)