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UPDATE 2-Time Warner Cable posts profit, initiates dividend

 * Q4 EPS 91 cents vs Wall St estimate of 88 cents
 * Q4 rev rose 3 pct to $4.5 bln, in line with estimates
 * Initiates quarterly dividend of 40 cents
 * Sees tough conditions for residential growth in Q1
 * Shares rise as much as 6 pct
 (Adds outlook, executive and analyst comments, share
movement)
 By Yinka Adegoke
 NEW YORK, Jan 28 (Reuters) - Time Warner Cable Inc TWC.N
posted a higher-than-expected quarterly profit on Thursday and
initiated a regular dividend of 40 cents per share.
 The dividend payout, which had been expected for some time
by investors, exceeded Wall Street expectations of around 31
cents and sent shares up as much as 6 percent in morning
trading.
 Chief Executive Glenn Britt said on a conference call that
the payout ratio of around 3.7 percent was higher than other
cable rivals such as Comcast Corp CMCSA.O and Cablevision
Systems Corp CVC.N and said there would be flexibility to
raise the dividend in the future.
 "With a sizable dividend in place we believe it will
attract investors from telco stocks as well," said Collins
Stewart analyst Thomas Eagan.
 Net income attributable to Time Warner Cable was $322
million, or 91 cents a share, beating analysts' average
forecast of 88 cents a share, according to Thomson Reuters
I/B/E/S.
 Revenue rose 3 percent to $4.5 billion, in line with
expectations.
 The second-largest U.S. cable TV operator said total video
subscribers in the fourth quarter declined by 105,000 to end
the year at 12.86 million. Miller Tabak analyst David Joyce had
been expecting a loss of 30,000 subscribers.
 Time Warner Cable added 120,000 residential Internet
subscribers and 75,000 residential phone subscribers. Joyce had
forecast 100,000 new Internet subscribers and 120,000 phone
subscribers.
 Company executives said that conditions for residential
customers remained tough into the current quarter and the
company is adding fewer customers than it did a year ago.
 Chief Operating Officer Landell Hobbs told investors the
company is betting on a strong performance in commercial
services which serve small- and medium-sized businesses. He
forecast 2010 revenue growth of above 20 percent.
 Commercial services is still a small part of Time Warner
Cable's business but is growing fast.
 The company also expects to see a boost in operating profit
from a return to growth in advertising sales.
 Time Warner Cable shares were up $1.68 or 3.9 percent at
$45.30 on the New York Stock Exchange, off an earlier high at
$46.24.
 (Reporting by Yinka Adegoke; Editing by Derek Caney and
Matthew Lewis)
 (yinka.adegoke@thomsonreuters.com; + 1 646 223 6081; Reuters
Messaging: Yinka.adegoke.reuters.com@reuters.net))


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