Time Warner Cable Q3 Earnings and Revenues Miss, Up Y/Y
Time Warner Cable Inc. (TWC) reported dismal financial numbers for the third quarter of 2014, with both the top and the bottom line missing the respective Zacks Consensus Estimate.
Quarterly adjusted (excluding special items) earnings per share of $1.86 fell short of the Zacks Consensus Estimate of $1.90. However, adjusted earnings increased 10.1% year over year.
Quarterly GAAP net income came in at $499 million or $1.76 per share compared with $532 million or $1.84 per share in the prior-year quarter. At $5,714 million, the quarter’s total revenue missed the Zacks Consensus Estimate of $5,753 million, but increased 3.6% year over year.
Time Warner Cable Inc - Earnings Surprise | FindTheBest
Quarterly adjusted operating income before depreciation and amortization (:OIBDA) grew 2.4% year over year to $2,054 million. However, operating income inched down 0.8% year over year to $1,151 million. Average monthly revenue per user (:ARPU) rose 1.4% to $106.58.
In the reported quarter, Time Warner Cable generated $1,448 million of cash from operations compared with $1,209 million in the prior-year quarter. Free cash flow in the third quarter of 2014 was $368 million as against $440 million in the year-ago quarter.
At the end of the third quarter of 2014, Time Warner Cable had $526 million in cash and marketable securities compared with $525 million at the end of 2013. Outstanding debt stood at $22,762 million as against $23,285 million at the end of 2013. At the end of the quarter under review, the debt-to-capitalization ratio stood at 0.74 against 0.77 at the end of fiscal 2013.
Residential Services Segment
Quarterly total revenue was $4,615 million, up 0.8% year over year. Within the segment, video revenues were $2,497 million, down 4% from the prior-year quarter. High-speed data revenues were $1,620 million, up 10.9% year over year. Voice revenues came in at $476 million, down 4.4% year over year. Other revenues were $22 million, up 10% from the year-ago quarter.
Subscriber Statistics: During third-quarter 2014, video subscribers declined by 184,000 to 10.827 million. High-speed data subscribers rose by 92,000 to 11.507 million. Voice subscribers grew 14,000 to 4.989 million. Single-play subscribers jumped 18,000 to 5.674 million while double-play subscribers dropped 12,000 to 4.700 million. Triple-play subscribers declined 24,000 to 4.083 million.
Business Services Segment
Quarterly total revenue stood at $724 million, up 28.5% year over year. Within the segment, video revenues were $93 million, up 6.9% year over year. High-speed data revenues were $343 million, up 21.6% year over year. Voice revenues totaled $132 million, up 20% from the year-earlier quarter. Wholesale transport revenues were $105 million, up a substantial 61.5% year over year. Other revenues came in at $51 million, up 2% year over year.
Subscriber Statistics: During third-quarter 2014, video subscribers grew 2,000 to 203,000. High-speed data subscribers rose 16,000 to 566,000. Voice subscribers improved by 11,000 to 313,000. Single-play subscribers increased 5,000 to 341,000. Double-play subscribers registered growth of 9,000 to 258,000. Triple-play subscribers increased 2,000 to 75,000.
Other Operational Segment
Quarterly total revenue was $438 million, up 11.5% year over year. Within the segment, advertising revenues grossed $276 million, up 9.1% from the prior-year quarter. Other revenues reached $162 million, up 15.7% year over year.
Strategic Move
In Feb 2014, Comcast Corp. (CMCSA) reached an agreement with Time Warner Cable to acquire the latter in an all-stock deal valued at around $45.2 billion. Liberty Media Corp. (LMCA), which controls a 27.3% stake in Charter Communications Inc. (CHTR), was also aggressively pursuing the idea of Charter Communications taking over Time Warner Cable. However, Charter Communications lost to Comcast in the bid.
At present, the proposed merger between Comcast and Time Warner Cable is under strict regulatory scrutiny. A decision is expected in the first quarter of 2015.
Time Warner Cable currently carries a Zacks Rank #3 (Hold).
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