Time Warner Cable Q2 Profit Declines, Results Miss View

(RTTNews) - Time Warner Cable Inc. (TWC) on Thursday reported a 7 percent decline in profit for the second quarter from last year as higher revenues were more than offset by an increase in expenses, including programming costs. Both revenue and adjusted earnings per share for the quarter missed analysts' estimates.

The company, which is being acquired by Charter Communications Inc. (CHTR), said its second-quarter net income attributable to shareholders was $463 million or $1.62 per share, down from $499 million or $1.76 per share in the previous-year quarter.

The decline in net income was primarily due to a decrease in operating income and an increase in income tax provision. These were partially offset by an increase in other income, which included a $120 million gain from the settlement of certain terms of an agency agreement with Verizon Wireless.

Adjusted earnings for the latest quarter were $1.54 per share, compared to $1.89 per share in the same period last year.

On average, 19 analysts polled by Thomson Reuters expected earnings of $1.81 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter rose 4 percent to $5.93 billion from $5.73 billion in the prior year, reflecting revenue growth at the Business Services and Residential Services segments. Analysts expected revenues of $5.94 billion.

Total costs and expenses increased 7 percent from the year-ago period to $4.90 billion, reflecting higher programming, employee, content and maintenance costs.

The increase in content costs was driven by higher content costs at SportsNet LA, a regional sports network carrying the Los Angeles Dodgers' baseball games and other sports programming.

Operating income declined 12 percent to $1.03 billion and was reduced by merger-related and restructuring costs of $82 million.

Business Services revenue climbed 16 percent from last year to $803 million, primarily due to increases in high-speed data and voice subscribers and growth in wholesale transport revenue, including cell tower backhaul revenue.

Residential Services revenue rose 2 percent to $4.76 billion on high-speed data revenue, partly offset by decreases in video and voice revenue.

Residential video net declines during the quarter were 45,000. Meanwhile, residential high-speed data net additions were 172,000, representing the best second quarter since 2008, while residential voice net additions totaled 252,000, the best second quarter ever.

TWC is trading at $189.98, up $0.55 or 0.29 percent on a volume of 72,921 shares.