By Dow Jones Business News, October 31, 2013, 07:04:00 AM EDT
By Ben Fox Rubin
(Adds background on CBS blackout.)
Time Warner Cable Inc.'s ( TWC ) third-quarter revenue grew modestly, helped by the cable operator's growth in
residential high-speed data and business services.
Like other pay-TV operators, Time Warner Cable has been challenged by increased programming fees demanded by media
companies that own TV channels, as well as more budget-conscious residential customers dropping video services. In
response, Time Warner Cable has focused more on its broadband cable and business-services units, where profit margins
remain higher. Building up the broadband business, the company earlier this month agreed to buy regional fiber-optic
network company DukeNet Communications for $600 million.
Time Warner Cable lost 306,000 residential video subscribers since the second quarter. The company also lost 24,000
residential high-speed data subscriptions and 128,000 residential voice subscribers in the latest period.
The company said the decline in subscriber activity during the quarter was hurt by programming disputes with CBS Corp.
( CBS ) and Journal Communications Inc. (JRN). A monthlong blackout of the CBS network on Time Warner Cable ended in
September, resolving one of the longest disputes between a pay-TV operations and a network in recent years.
Revenue from residential customers was still up 0.7% to $4.58 billion, as a 14% rise in high-speed data revenue made
up for drops in video and voice. Business services revenue jumped 21% to $594 million.
The company posted a profit of $532 million, or $1.84 a share, down from $808 million, or $2.60 a share, a year
earlier. Excluding gains on the sales of investments in Clearwire and SpectrumCo licenses a year ago and other one-time
items, per-share earnings were up at $1.69 from $1.41.
Revenue improved 2.9% to $5.52 billion.
Analysts polled by Thomson Reuters expected a per-share profit of $1.65 on revenue of $5.54 billion.
Shares closed Wednesday at $116.88 and were inactive premarket. The stock is up 20% since the start of the year.
Write to Ben Fox Rubin at email@example.com
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