Time Warner Cable 3Q net income rises

NEW YORK – Time Warner Cable Inc., the country's second-largest cable company, lost more cable-TV subscribers in the latest quarter than it ever has before, keeping the question alive of whether Internet video is finally starting to cut into the cable business.
Cable executives have so far dismissed the idea that "cord-cutting" is due to the encroachment of the Internet — high-end TVs now come with the built-in ability to watch Internet movies and TV shows — and blamed the speedup in subscriber flight on the weak economy.
Yet Time Warner Cable on Thursday reported losing 155,000 video subscribers in the latest quarter, compared to 64,000 in the same period last year, when the economy was worse.
The only larger cable company, Comcast Corp., last week reported that its subscriber loss more than doubled in the third quarter, to 275,000.
Whatever the reason for the subscriber flight, cable companies are more than compensating for the loss of subscribers by selling more services to the remaining ones.
New York-based Time Warner Cable said its third-quarter net income was $360 million, or $1 per share, up from $268 million, or 76 cents per share, a year earlier.
Revenue rose 5.2 percent to $4.73 billion.
The earnings were boosted by a net 4 cents per share from various items. Excluding those, results still exceeded the average analysts forecast of earnings of 89 cents per share on revenue of $4.72 billion, as polled by Thomson Reuters.
In pre-market trading Thursday, Time Warner Cable shares rose 6 percent, or $3.81, to $63.47.
Time Warner Cable also announced its first stock buyback program since it was spun off from media conglomerate Time Warner Inc. in early 2009. It will buy back shares from time to time worth $4 billion, or 19 percent of its current market capitalization.
The buyback program was expected by analysts, but Christopher King at Stifel Nicolaus said he was expecting a smaller one, at $3 billion to $3.5 billion. However, since the buyback program has no deadline, it's not clear how much money will be spent each year.
Cable companies have been losing total video subscribers for some time, but they usually compensate by upgrading basic subcribers to more expensive digital tiers, as well as adding broadband and phone subscribers. However, Time Warner Cable lost digital video subscribers and added a record-low 22,000 phone subscribers, meaning it lost overall "revenue-generating units," an important measure in the industry. King said this is probably the first time any major cable company has lost "units" in a quarter.