Published August 01, 2013
Time Warner Cable (TWC) posted a 6.4% rise in second-quarter profits amid stronger business services growth, but the No. 2 U.S. cable operator’s revenue and data subscriber growth failed to meet expectations.
Shares of the New York-based former unit of Time Warner (TWX) flatlined in the wake of the mixed results and despite plans to boost share buybacks by $4 billion.
Time Warner Cable said it earned $481 million, or $1.64 a share, last quarter, compared with a profit of $452 million, or $1.43 a share, a year earlier.
Excluding one-time items, it earned $1.69 a share, besting the Street’s view by a nickel.
However, revenue increased 2.7% to $5.55 billion, narrowly missing consensus calls from analysts for $5.58 billion.
Time Warner Cable said it added 21,000 high-speed Internet subscribers on a net basis in the second quarter, badly trailing estimates from analysts for growth of 55,400.
The cable operator reported a loss of 191,000 residential video customers, worse than the 176,100 that had been forecasted.
Time Warner also lost 56,000 residential phone customers, more than twice as many as feared.
While advertising sales slid 1.9% to $260 million, business services sales jumped 22% to $565 million.and “other” revenue soared 60% to $93 million.
“Time Warner Cable continues to build significant shareholder value by investing in rapidly expanding business services and by revitalizing our residential services operations," CEO Glenn Britt said in a statement.
Meanwhile, Time Warner Cable said its board of directors signed off on plans to increase its share repurchase authorization to $4 billion. The company said it bought back 6.6 million shares during the second quarter.
Shares of Time Warner Cable had a muted response to the news, recently trading up 0.07% to $114.15. The stock has rallied about 17% so far this year, compared with 20.7% for rival Comcast (CMSA).
In recent weeks, Time Warner Cable and CBS (CBS) have been pitted against each other in a battle over a new carriage agreement. After CBS was briefly blacked out for Time Warner customers, the two sides have since extended a deadline until Friday evening.