TWC Profits See 5% Uptick, But Loses Significant Video Customers

In the midst of fending off a takeover bid, Time Warner Cable posted higher profits in the fourth quarter of 2013.
Time Warner Cable grew 5.3% in net profit to $540 million during the period, with company-wide revenue inching up 1.7% to $5.58 billion.

The company gained 14% in broadband revenues to $1.5 billion and 20% in business services to $616 million. Time Warner added 39,000 residential high-speed data subscriptions, 18,000 combined business services customers, and 1,000 residential voice subscribers.

At the same time, Time Warner Cable lost another significant amount of video subscribers during the period -- down 217,000 video customers to end 2013 with 11.2 million video subscribers.  

In the third quarter, Time Warner Cable dropped a massive 306,000-plus video customers -- in part because of its high-profile carriage fee battle with CBS. Time Warner Cable and other cable operators are continually challenged by higher programming costs -- as well as fewer video subscribers.

Video subscriber revenues still represent the bulk of the company’s business: $10.5 billion for 2013; broadband revenues are next at $5.8 billion; with voice business at $2.03 billion.

Local cable advertising sales was down 11.2% to $278 million in the period and off 3.2% to $1.02 billion for the full year 2013. The decline was mainly due to lower political advertising revenue. Political advertising revenue was $7 million and $28 million in the fourth quarter and full year 2013, compared to $60 million and $114 million for the fourth quarter and full year 2012.

Midday trading witnessed Time Warner Cable’s stock 1.2% higher to $133.65.

When asked about a possible takeover offer from Charter Communications, Time Warner Cable chief executive officer Rob Marcus, in the earnings call, reiterated the company is only interested in an offer above $160 per share. Charter had offered a $132.50 bid, rejected by Time Warner Cable in early January.

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