Time Warner Cable profit misses, loses more video

The entrance to the Time Warner Center is seen at Columbus Circle in New York August 4, 2010.

(Reuters) - Time Warner Cable Inc's (TWC.N) third-quarter profit missed analysts' expectations as mounting costs and a continued drop in video subscriptions pinched the No. 2 U.S. cable television operator.

The company and its cable industry peers have been losing video customers to phone and satellite providers and Internet companies such as Netflix Inc (NFLX.O) and Hulu.

Time Warner Cable lost 128,000 video subscribers in its residential services business in the quarter. However, it added 89,000 subscribers for its broadband services during the period.

The company said it benefited from increasing prices for video customers during the quarter, but a decline in video subscribers led to lower revenue.

The company posted revenue of $4.91 billion -- slightly below the $4.95 billion pegged by Wall Street analysts, according to Thomson Reuters I/B/E/S.

Profit for the three-month period ended September 30 fell to $356 million, or $1.08 a share, compared with $360 million or $1.00 a share last year.

Analysts on average were looking for $1.13 a share in profit for the quarter.

The company, which competes with Comcast Corp (CMCSA.O) and Cablevision Systems Corp (CVC.N), said operating expenses during the quarter rose primarily due to higher employee costs and video programing expenses.

Shares of the company closed at $70.63 on Wednesday on the New York Stock Exchange.

(Reporting by Himank Sharma in Bangalore; Editing by Saumyadeb Chakrabarty)