Time Warner Cable Loses More TV Customers, Says Web Still Can't Substitute

Loses 129,000 Video Subscribers but Adds 130,000 Broadband Subscriptions

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Time Warner Cable, the second-largest cable-TV provider in the U.S., reported fourth-quarter profit that beat analysts' estimates as it continued to reposition itself as a broadband provider first.

Net income rose to $564 million from $392 million a year earlier, the New York-based company said today in a statement. Excluding one-time items, earnings per share climbed to $1.39 from 99 cents, exceeding the $1.20 average of analysts' estimates compiled by Bloomberg.

Fourth-quarter high-speed data customers increased by 130,000, better than the 96,000 average estimate of 10 analysts surveyed by Bloomberg. The company lost 129,000 more residential video subscribers, fewer than the 141,000 video subscribers it lost in the fourth quarter a year ago.

Cable companies typically say video-subscriber losses reflect fewer new-home starts and competition from satellite and services such as FiOS -- not a "cord cutting" defection from the traditional pay TV model in favor of Hulu, Netflix, iTunes and other alternatives. Time Warner Cable said today that web-based video still isn't having a huge impact on its video subscribers, saying those services are "not a substitute at this point."

But web access is the growth business. "At this point for Time Warner Cable, broadband is the main story, and video is secondary," said Paul Sweeney, an analyst at Bloomberg Industries.

Time Warner Cable did not address the ongoing dispute with MSG Network, which has pulled its signal as it seeks higher fees from the company. MSG carries New York Knicks basketball and New Jersey Devils hockey.

Comcast, the largest U.S. cable operator, is scheduled to release fourth-quarter earnings on Feb. 15.

-- Bloomberg News --

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