Time Warner Cable Profit Jumps on Higher Subscriptions

Time Warner Cable Inc. said its first-quarter profit jumped 19% as the pay-TV and Internet provider logged growth in high-speed data and business services revenue, while adding to its overall residential subscriptions.

Earnings topped analysts' expectations.

After spurning several offers from smaller peer Charter Communications Inc., Time Warner Cable in February agreed to be bought by Comcast Corp. for $45 billion in stock, a deal that triggered regulatory debate and fierce criticism from other media companies. Video streaming service Netflix Inc. said this week it opposes the merger because the combined corporation would dominate the U.S. market for broadband Internet.

Time Warner Cable and Comcast--who have repeatedly said they don't compete directly in cable and broadband markets--have defended the deal to lawmakers and critics alike, saying the merger would better enable them to compete with the likes of Verizon Communications Inc., Google Inc. and Amazon.com Inc.

Time Warner Cable, like its pay-TV rivals, has worked to rely more on broadband Internet as it fights a two-front battle as content providers and TV channel owners have sought higher programming fees while consumers increasingly cut back on pay-TV service in favor of streaming services.

Despite losing 34,000 residential video subscribers during the first quarter--the smallest such drop in five years--the company added 148,000 overall residential customer relationships, its highest such gain in more than seven years, it said. It gained 269,000 residential high-speed data subscribers, its most since the first quarter of 2008, and residential voice subscribers grew by 107,000.

Revenue from residential customers slipped nearly 1% to $4.57 billion, as declines in video and voice revenue offset gains in high-speed data revenue. Business services revenue rose 24% to $668 million.

Overall, Time Warner Cable posted a profit of $479 million, or $1.70 a share, up from $401 million, or $1.34 a share, a year earlier. Excluding merger-related restructuring costs, per-share earnings rose to $1.78 from $1.41.

Revenue rose 2% to $5.58 billion.

Analysts surveyed by Thomson Reuters had projected a $1.67 a share in earnings and $5.64 billion in earnings.

Write to Michael Calia at [e-mail]

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