Time Warner Cable Inc. (TWC), the second-largest cable operator in the U.S., is slated to release its third-quarter earnings results before the market open Thursday. On average, 19 analysts surveyed by Thomson Reuters expect the company to post earnings of $0.75 per share for the quarter, with estimates ranging between $0.68 and $0.85 per share. Analysts' estimates typically exclude special items. Revenues for the quarter are estimated to be $4.47 billion, representing a 3.1% growth from last year.
The New York -based company, which was formerly operated as a subsidiary of media and entertainment giant Time Warner Inc. (TWX), operate independently as of March 12, 2009.
In the same quarter a year ago, the company, as a subsidiary still, recorded net income of $301 million or $0.31 per share, based on 978.2 million shares outstanding, including one-time items of $32 million or $0.03 per share, on revenues of $4.34 billion. As per analysts' report, the company's last year's recast earnings were $0.93 per share.
Time Warner Cable provides video, data, and voice service to residential and commercial customers in five geographic areas in U.S., such as New York State, the Carolinas, Ohio, southern California and Texas. The company serves more than 14 million customers who subscribe to one or more of its video, high-speed data and voice services. Among its divisions, Time Warner Cable Business Class offers phone, Internet, Ethernet and cable television services, and its advertising arm, Time Warner Cable Media Sales, offers national, regional and local companies innovative advertising solutions that are targeted and affordable.
Cable service providers have been hit as consumers scaled back on expenditures, including landline phone service and pricey premium service packages, amid the economic slowdown. The continued weakness in the housing market has also become a drag on the ability of these companies to find new customers. In addition, they face increased competition from telecommunication service providers that offer rival services in more markets
Time Warner Cable's former parent company, Time Warner, which expects to spin off AOL unit by the end of the year, reported Wednesday a lower profit for the third quarter, reflecting weak revenues at the AOL, Publishing and Filmed Entertainment segments that more than offset growth at the Networks segment. The New York-based company's third-quarter net income attributable to shareholders was $661 million or $0.55 per share, compared to $1.07 billion or $0.89 per share in the year-ago quarter. Adjusted income from continuing operations declined to $724 million from $784 million in the prior-year quarter. Total revenues dropped 6% year-over-year to $7.14 billion.
However, the media firm raised its full-year profit forecast, which is seen as an encouraging sign for the recession-hit advertising market. Time Warner Chairman and Chief Executive Officer Jeff Bewkes said: "Time Warner is firmly on track to post solid results this year in spite of the tough economic environment. Driven by the better-than-expected performance at our Content Group this quarter, we're raising our 2009 business outlook."
In its preceding second quarter, Time Warner Cable said its net income attributable to the company increased to $316 million or $0.89 per share from $277 million or $0.85 per share in the comparable period. Earnings per share were based on 353.7 million shares outstanding, while prior year's number of shares, on a recast basis, was 326.0 million.
Excluding the impact of certain one-time items, second-quarter net income attributable to TWC decreased from last year, due primarily to higher interest expense related to the debt incurred to fund the company's $10.9 billion special cash dividend paid in March 2009, partly offset by an increase in operating income and a decrease in net income attributable to non-controlling interests.
Total revenues rose 4% to $4.47 billion from $4.30 billion in the year earlier period. Subscription revenues grew 6% and video revenues rose 3%, driven by video price increases and continued growth in digital video subscribers partially offset by a year-over-year decrease in basic video subscribers and premium channel subscribers. High-speed data revenues increased 9%, driven by continued high-speed data subscriber growth, and voice revenues were up 19% reflecting growth in Digital Phone subscribers, partially offset by lower average revenues per subscriber. Meanwhile, advertising revenues in the quarter declined 25%, due to declines in most advertising categories.
Among others in the sector, cable services provider Comcast Corp. (CMCSA, CMCSK) Wednesday reported a 22% increase in third-quarter profit to $944 million or $0.33 per share from $771 million or $0.26 per share last year, helped by an increase in revenues and lower capital spending during the quarter. The Philadelphia, Pennsylvania-based company's earnings per share, excluding items, would have grown 21.7% over the prior year. Revenues increased 3% to $8.80 billion from $8.55 billion a year ago. However, the company reported slower customer growth in the latest quarter compared to previous year, although results were an improvement over the preceding second quarter.
Comcast is reportedly in talks to acquire a 51% stake in General Electric Co.'s (GE) NBC Universal at three-and-a-half year and seven-year intervals. NBC Universal owns the NBC television network, Telemundo, Universal Studios theme parks and the Universal Pictures movie studio, as well as the cable networks Bravo, USA and CNBC.
DIRECTV Group Inc. (DTV) is scheduled to release its third-quarter results today, with analysts forecasting earnings of $0.39 per share on revenues of $5.42 billion, in comparison to prior year's earnings of $0.33 per share and revenues of $4.98 billion.
Another peer, Dish Network Corp. (DISH) will announce financial results for its third quarter on Monday, November 9. Analysts expect the company to report earnings of $0.46 per share on revenues of $2.93 billion for the quarter, compared to last year's earnings and revenues of $0.20 per share and $2.94 billion, respectively.
TWC closed Wednesday's regular trading session at $40.05, up $0.43 or 1.09%, on a volume of 2.30 million shares. In the past 52 weeks, shares have been trading in a broad range of $20.19 to $70.50.
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