Time Warner Cable Inc.
) reported mixed financial results for the third quarter of 2013.
The bottom line beat the Zacks Consensus Estimate while the top
line missed the same. Importantly, the company lost a significant
amount of video and telephony subscribers in the reported
quarter. Time Warner Cable currently carries a Zacks Rank #3
Quarterly adjusted (excluding special items) earnings per
share of $1.69 substantially beat the Zacks Consensus Estimate of
$1.64. Quarterly GAAP net income was $532 million or $1.84 per
share compared with $808 million or $2.60 per share in the
prior-year quarter. At $5,518 million, quarterly total revenue
fell short of the Zacks Consensus Estimate of $5,542 million, but
was up 2.9% year over year.
Quarterly adjusted operating income before depreciation and
amortization (OIBDA) grew 3% year over year to $2,005 million.
Operating income climbed 6% year over year to $1,160 million.
During the third quarter of 2013, Time Warner Cable repurchased
4.8 million shares for $545 million and also paid $187 million in
dividends. Average monthly revenue per user rose 2% to $105.
In the reported quarter, Time Warner Cable generated $1,209
million of cash from operations compared with $1,195 million in
the prior-year quarter. Free cash flow in the third quarter of
2013 was $440 million as against $423 million in the year-ago
At the end of the third quarter of 2013, Time Warner Cable had
$1,126 million in cash and marketable securities compared with
$3,454 million at the end of 2012. Outstanding debt was $25,032
million as against $25,171 million at the end of 2012. At the end
of the third quarter of 2013, the debt-to-capitalization ratio
was 0.78 as against 0.77 at the end of 2012.
Residential Services Segment
Quarterly total revenue was $4,579 million, up 0.7% year over
year. Within the segment, video revenues were $2,600 million,
down 4.5% from the prior-year quarter. High-speed data revenues
were $1,461 million, up 14.2% year over year. Voice revenues were
$498 million, down 6% year over year. Other revenues were $20
million, up 17.6% from the year-ago quarter.
Business Services Segment
Quarterly total revenues were $594 million, up 20.5% year over
year. Within the segment, video revenues were $87 million, up
4.8% year over year. High-speed data revenues were $282 million,
up 20% year over year. Voice revenues were $110 million, up by a
substantial 32.5% from the year-earlier quarter. Wholesale
transport revenues were $65 million, up 38.3% year over year.
Other revenues were $50 million, up 11.1% year over year.
Advertising revenues dropped 4.2% year over year to $253
Other revenues came in at $92 million, up 58.6% year over
Cable TV operators are gradually losing video subscribers to
large telecom operators, such as
Verizon Communications Inc.
) and online video streaming service providers like
). Time Warner Cable is also facing the brunt of growing
On Sep 30, 2013, Residential Video subscribers' base was
11.414 million. Time Warner Cable lost 306,000 residential video
subscribers in the reported quarter. At the same time, the
Commercial Video subscribers' base was 193,000, indicating a
quarterly gain of 2,000 subscribers.
Residential High-speed Data subscribers' base was 11.050
million. The company lost a net 24,000 residential High-Speed
Data subscribers. Commercial High-speed Data subscribers' base
was 500,000. The company also added 15,000 commercial High-speed
Data subscribers. Residential voice subscribers' base was 4.805
million, a quarterly loss of 128,000 subscribers. Commercial
voice subscribers' base was 262,000. Time Warner Cable gained
12,000 commercial voice subscribers in the reported quarter.
In the third quarter of 2013, Time Warner Cable lost 144,000
Triple play subscribers totaling 4.053 million and 24,000 Double
play subscribers totaling 5.044 million. However, the company
gained 51,000 single-play subscribers totaling 5.978
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