UPDATE 2-Time Warner Cable profit rises, but outlook weak

(Adds CEO comment, byline, stock activity)

By Paul Thomasch

NEW YORK, Feb 6 (Reuters) - Time Warner Cable Inc (TWC.N: Quote, Profile, Research, Stock Buzz), the second-largest U.S. cable operator, on Wednesday posted a better-than-expected 23 percent rise in quarterly profit, but warned that 2008 earnings would fall below expectations.

The outlook, which sent Time Warner Cable's shares sharply lower before they recovered, comes as investors wait for answers by parent Time Warner Inc (TWX.N: Quote, Profile, Research, Stock Buzz) about plans for its 84 percent stake in the cable company.

Time Warner Inc. said on Wednesday only that the companies were talking about changes to the ownership structure.

As for 2008, "we recognize we are facing robust competition and a very uncertain economy," Time Warner Cable Chief Executive Glenn Britt said on a conference call.

For the year, the company forecast earnings per share of $1.25 to $1.30 from continuing operations, while analysts on average were expecting $1.37, according to Reuters Estimates.

Time Warner Cable forecast revenue growth of about 9 percent for the year from almost $16 billion in 2007.

The U.S. housing downturn has dragged on subscriber growth for Time Warner Cable as it meant higher numbers of unoccupied homes. The company has also instituted more stringent credit standards in anticipation of economic troubles, which has kept bad debt level steady but also pushed some potential customers out of the fold.