UPDATE 3-Time Warner Cable to cut 1,250 jobs, sees 2009 profit
* To cut 1,250 jobs, or 3 percent of workforce
* Sees 2009 EPS $1, including restructuring charges
* Reuters Estimates 2009 EPS $1.05, excluding charges
* Q4 EPS ex-items 35 cents versus estimates 32 cents
* Shares up 3.6 percent
* Plans reverse stock split (Adds reverse stock split, comments from CFO, CEO)
NEW YORK, Feb 4 (Reuters) - Time Warner Cable Inc (TWC.N) said it will cut nearly 3 percent of its workforce to reduce costs in the face of the weak economy and more competition but forecast 2009 profit near the high end of expectations.
Shares of the No. 2 U.S. cable service provider rose 3.6 percent on Wednesday after it also reported a higher-than-expected fourth-quarter profit, excluding a previously announced $15 billion write-down of assets.
Nonetheless, analysts said subscriber growth was below their expectations, even though the company had warned of a marked slowdown.
"Even though management had communicated that fourth quarter subscriber growth would be challenged, we believe (sales of new services) are materially below Street expectations," Barclays Capital analyst Vijay Jayant wrote in a client note.
The New York-based company said it lost more than 119,000 basic video subscribers in the quarter, compared with Barclays' target of a loss of 25,000. It sold 175,000 new services, far short of Barclays' forecast of 408,000.
It forecast 2009 profit at $1 a share, including a charge ranging from $50 million to $100 million for the job cuts.
It said profit before the charge would be $1.06 to $1.11 per share, based on Time Warner Cable's 902 million common A shares outstanding, compared with the average analyst expectation of $1.05 a share. Wall Street targets ranged from 85 cents to $1.28, according to Reuters Estimates.
Time Warner Cable will pay a special one-time dividend of $10.27 per share to shareholders in its separation transaction from Time Warner Inc (TWX.N), which is expected to complete the split or spin-off of it 84-percent stake by March 31.
Chief Financial Officer Rob Marcus said in connection with the separation the cable company is considering a reverse stock split. A reverse stock split will reduce its share count and could help avoid its stock price dropping into single digits after it has paid out the dividend, analysts said.
NOT IMMUNE
Chief Executive Glenn Britt said the slower fourth-quarter growth showed that Time Warner Cable was not immune to the weak economy and to its competitors, including AT&T Inc (T.N) and Verizon Communications Inc (VZ.N).
The company will slash 1,250 jobs during 2009. Britt said the company will compete aggressively but will focus even more on managing its operating and capital spending to fit the "economic realities."
"We'll market our services aggressively, asserting our competitive advantages," said Britt, who said the company is "cautiously increasing" its marketing spend in the current quarter from the previous period.
Time Warner Cable posted a net loss of $13.2 billion, or $8.36 per share, due to asset write-downs, compared with a year-earlier profit of $327 million, or 33 cents a share.
Excluding the one-time charges, profit rose to 35 cents a share, compared with the average analyst expectation of 32 cents, according to Reuters Estimates.
Revenue rose 8 percent to $4.4 billion, in line with expectations.
It said last month it would take a $15 billion write-down on the value of its cable franchise rights and its stake in a wireless joint venture with Clearwire Corp (CLWR.O).
Britt said on a conference call that Time Warner Cable plans to introduce its first wireless offering with Clearwire in at least one U.S. city this year.
Time Warner Cable added 44,000 new digital video subscribers, 113,000 high-speed Internet subscribers and 137,000 phone subscribers in the fourth quarter.
The company's stock rose 62 cents to $18.97 on the New York Stock Exchange, but remained far below the 52-week high of $31.54 last May. (Go to here for Reuters MediaFile blog)) (Editing by Lisa Von Ahn, Jeffrey Benkoe, Phil Berlowitz)
