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Huge Cable Profits For Time Warner

While its IPO filing offered little new information about the cable company's strategy or its growth projections, it did reveal that Time Warner Cable is extremely profitable for its parent, with 2005 net income of almost $1.3 billion. Time Warner typically doesn't break out the profits for each of its units when it reports its earnings, although it does provide a metric of its own making--"OIBDA"-which stands for operating income before depreciation and amortization for each of its movie, network, publishing, AOL and cable divisions.

Still, Time Warner Cable had a standard measurement, too. Cable accounted for 43% of Time Warner's 2005 profits, even though it represented only 22% of revenue. And while the parent company's net income fell in 2005, the cable unit's profit jumped 72%, due largely to a big drop in the income-tax provision assigned to cable.

The numbers underscore a big change in the financial health of the cable sector. It wasn't that long ago that cable companies didn't show profits or free cash flow, because of capital spending for upgrades to their systems.

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Read the whole story at Fortune via CNNMoney »

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