(Adds CEO comments on FCC rules, analyst quote, comparative
data from previous quarters)
By Liana B. Baker
NEW YORK, April 24 Time Warner Cable Inc
lost fewer subscribers than expected and posted healthier
results for its residential business, a sign that the turnaround
plan it unveiled early this year may be starting to work.
Reporting results for the first quarter, the company said on
Thursday it lost 34,000 video subscribers on a net basis, fewer
than the 77,300 Wall Street analysts were expecting.
It also added 269,000 Internet subscribers - the most since
the first quarter of 2008. Analysts had expected the company to
add 179,300 subscribers, according to StreetAccount.
The company, which agreed to be acquired by Comcast Corp
for $45.2 billion, is coming off several quarters
where it shed hundreds of thousands of video subscribers.
It earlier reported it lost 217,000 video subscribers in the
fourth quarter of last year, which was an improvement from the
third quarter when it lost more than 300,000 subscribers.
In January, the company said it would increase annual
capital expenditures to $3.7 billion to $3.8 billion over the
next three years, which should allow the company to improve its
cable systems, invest in infrastructure and replace older
Most cable companies have been shedding video subscribers for
the past few years, losing them to satellite and telecom rivals
as well as newer Web-based entrants such as Netflix Inc
"Optimists will argue with some justification that there is
nothing here so dire that time, or Comcast, can't fix," said
MoffettNathanson Research analyst Craig Moffett.
Comcast said on Tuesday it added a better-than-expected
24,000 video subscribers in the quarter as well as 383,000
Regarding the Comcast deal, Time Warner CEO Rob Marcus said
"the regulatory approval process is going very much as planned
and the integration planning process is going even better than
Marcus also said the company will have to look at "new
business models ... resulting from anything the FCC might do."
U.S. Federal Communications Chairman Tom Wheeler is
proposing new rules that could give broadband providers to
strike "commercially reasonable deals" with media and content
companies to deliver traffic to users faster.[ID: nL2N0NF1E9]
Analysts say this could potentially be a windfall for
companies that provide Internet service such as Time Warner
Barclays analyst Kannan Venkateshwar said in a research note
that "tiered broadband pricing at both ends of the broadband
pipe could become real sooner than we expected" which could
generate additional revenues for Internet service providers.
Time Warner Cable's quarterly profit jumped 19.5 percent to
$479 million, or $1.70 per share, in the first quarter ended
Excluding items, earnings were $1.78 per share, topping the
analysts' estimate of $1.68 per share, according to Thomson
Revenue rose 2 percent to $5.58 billion. Analysts were
expecting $5.64 billion.
Time Warner Cable shares rose 0.3 percent to $40.25 on
(Reporting by Liana B. Baker, Aurindom Mukherjee and Soham
Chatterjee; Editing by Joyjeet Das, Saumyadeb Chakrabarty and W
(Additional reportng by Aurindom Mukherjee and Soham
Chatterjeea, Editing by Joyjeet Das, Saumyadeb Chakrabarty and