Time Warner Cable Inc. (TWC: Quote), a provider of video, high-speed data and voice services, Thursday reported a decline in third-quarter profit, reflecting SpectrumCo and Clearwire-related gains in the prior year. However, total revenue grew about 3 percent, driven by growth in business services revenue and residential high-speed data revenue.
The company said it grew business services revenue over 20 percent for the 14th consecutive quarter. The growth was primarily due to increases in number of high-speed data and voice subscribers and growth in cell tower backhaul and Metro Ethernet revenue.
Average monthly revenue per residential customer relationship or ARPU grew 1.9 percent to $105.06, driven by robust growth in ARPU per new customer relationship.
Time Warner's Residential video revenue decreased on lower video subscribers and premium network revenue in connection with a temporary blackout of Showtime resulting from a dispute with CBS Corp. (CBS-A, CBS).
CBS had dropped its channels from Time Warner Cable's TV service including New York, Los Angeles and other major markets, after both the companies failed to reach an agreement on fees.
For the third quarter, Time Warner posted net income attributable to shareholders of $532 million or $1.84 per share, lower than $808 million or $2.60 per share in the previous year.
Adjusted earnings for the recent quarter totaled $1.69 per share, while the company posted $1.41 per share for the third quarter of 2012. On average, 30 analysts polled by Thomson Reuters expected the company to report earnings of $1.65 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter increased 2.9 percent to $5.52 billion from $5.36 billion in the prior-year quarter, but came in slightly below analysts' estimate of $5.54 billion.
The revenue growth was driven mainly by 20.5 percent growth in business services revenue and 14.2 percent rise in residential high-speed data revenue.
Residential services revenue increased 0.7 percent to $4.6 billion and business services revenue grew 20.5 percent to $594 million, while advertising revenue decreased 4.2 percent to $253 million. Other revenue climbed 58.6 percent to $92 million.
TWC closed Wednesday's regular trading at $116.88 on the NYSE.
by RTT Staff Writer
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