Time Warner Cable Earnings Jump 20% Over Broadband Growth

Apr 29 2014, 8:04am CDT | by

Time Warner Cable recently reported its Q1 2014 earnings with 20% jump in quarterly profits to $479 million or $1.70 per share. The revenues grew by 2% to $5.58 billion, led by 11% revenue growth in the broadband business. The company added 269,000 broadband subscribers, the most since the first quarter of 2008. The growth in broadband segment was driven by the higher average revenue per subscriber, which increased by 9% to $46.32. On the pay-TV front, the company managed to cut down its residential subscriber losses to 34,000 as compared to 217,000 subscribers it lost in the last quarter of 2013.
/>

TWC’s business services segment continued to outperform with 24% revenue gains, driven by the growth in broadband and voice subscribers. Going forward, the company should continue to see robust growth in its broadband business due to the increasing demand for higher speed and connectivity. However, taming the pay-TV subscriber losses remains a key challenge for the company.

See our complete analysis for Time Warner Cable

Pay-TV Subscriber Trends Improve

The pay-TV business contributes around 45% to Time Warner Cable’s value, according to our estimates. During the first quarter, pay-TV revenues declined by 7% to $2.58 billion as compared to the prior year quarter. Pay-TV ARPU remained flat at $74.51 for the quarter.
/>

The company has been losing video subscribers for several quarters now. The pay-TV operators in the U.S. lost over 104,000 subscribers in 2013. This can be largely attributed to a combination of market saturation, fierce competition, and the increased focus of providers on acquiring higher value subscribers. Moreover, some consumers opt for a lower-cost mixture of over-the-air TV, Netflix and other over-the-top viewing options. While Comcast has managed to turnaround its subscriber losses in the last two quarters over its X1 platform and triple play bundling, it appears a challenging roadmap for Time Warner Cable (Read – Comcast Adds Pay-TV Subscribers For The Second Consecutive Quarter; Q1 Results Impressive With Strong Growth Across The Segments). Even for Comcast, we believe this turnaround could be short-lived as cord cutting continues and alternate video platforms such as Netflix continue to add more subscribers (Read Netflix Continues To Benefit From Content Superiority).

Broadband Subscriber Additions Best Since 2008

Broadband contributes close to 34% of Time Warner Cable’s stock value, according to our estimates. Broadband revenues increased by 11% to $1.56 billion in the first quarter. Around $29 million revenues came form DukeNet, which was acquired by Time Warner Cable towards the end of 2013. High speed Internet revenue from business services jumped 20% to $306 million. Broadband has remained the leading growth factor for the cable companies for quite some time now. There is a boom in demand for broadband in the U.S. as there is a growing need for speed and connectivity. Currently, broadband has penetrated into 75% homes and there is still much room left for growth, and this will benefit the cable industry in particular as it accounts for 59% of the U.S. broadband market. We expect Time Warner Cable to continue to add broadband subscribers in the near term.

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Pakistan blocks three Saarc connectivity pacts; Modi, Sharif avoid meeting (Intro Roundup)
Kathmandu, Nov 26 (IANS) Pakistan Wednesday played spoilsport by blocking three major Saarc connectivity projects initiated by India, even as Indian Prime Minister Narendra Modi conspicuously avoided meeting his Pakistani counterpart Nawaz Sharif while he met five other South Asian leaders here.
 
 
Way out of debt crisis far from easy: Angela Merkel
Berlin, Nov 26 (IANS) German Chancellor Angela Merkel Wednesday said the way out of the European debt crisis is long and far from easy.
 
 
The Black Friday 2014 Sales You can Shop Today 11/26
The Black Friday 2014 Sales You can Shop Today 11/26
Over 20 Black Friday 2014 sales are already launched. Get the deals early to get your head free for the hard to get Black Friday deals to be released on Thanksgiving Day.
 
 
Pakistan blocks three Saarc connectivity pacts; Modi, Sharif avoid meeting (Roundup)
Kathmandu, Nov 26 (IANS) Pakistan Wednesday played spoilsport by blocking three major Saarc connectivity projects initiated by India, even as Indian Prime Minister Narendra Modi conspicuously avoided meeting his Pakistani counterpart Nawaz Sharif while he met five other South Asian leaders here.
 
 
 

Latest from the Network

Ukrainian president hails NATO, US support in conflicts
Kiev, Nov 26 (IANS) Ukrainian President Petro Poroshenko Wednesday appreciated support and help of NATO and the US in dealing with the conflicts with independence-seeking insurgents in eastern Ukraine, Xinhua reported...
Read more on Politics Balla
 
Andy Serkis used dancers for The Avengers
Andy Serkis used ''body-popping experts'' to bring villain Ultron to life in 'The Avengers' sequel. The motion capture genius was asked by Marvel Studios to work on 'The Avengers: Age Of Ultron' to perfect the movements...
Read more on Movie Balla
 
Frank Grillo to play Crossbones in Captain America: Civil War
Frank Grillo will star as Crossbones in 'Captain America: Civil War'. The 51-year-old actor will return for the third movie in the Marvel franchise, in which viewers will see him transform from Brock Rumlow into the...
Read more on Movie Balla
 
Alan Cumming tells people he's a porn star
Alan Cumming tells people who don't recognize him that he's a porn star. The 'Smurfs 2' actor enjoys pretending he's an erotic actor when people realize they've seen him before but can't quite place where he's from,...
Read more on Celebrity Balla
 
Lorde mistaken for Taylor Swift's manager
Lorde was once mistaken for Taylor Swift's manager. The 18-year-old singer, who is pals with the 'Blank Space' hitmaker, has recalled her first meeting with the 24-year-old star was an eventful one in which she had an...
Read more on Celebrity Balla
 
Elizabeth Hurley's pig gives birth
Elizabeth Hurley's pet pig has given birth to six piglets. The 49-year-old actress - who lives on a farm near Cirencester, south west England - has been left overjoyed after her porker Penelope gave birth to a large...
Read more on Celebrity Balla
 
Tom Hanks' son Chet reveals cocaine addiction
Tom Hanks' son Chet has been ''struggling'' with a cocaine addiction. The 24-year-old - whose real name is Chester - took to his Instagram account to reveal he is now sober from the Class A drug and alcohol following a...
Read more on Celebrity Balla
 
Angelina Jolie's Oscar ambition
Angelina Jolie says it would mean a ''great deal'' to her if her new movie 'Unbroken' won her an Oscar. The Hollywood star is very proud of the film she has directed, which is about the life of World War II hero Louis '...
Read more on Celebrity Balla
 
The Black Friday 2014 Sales You can Shop Today 11/26
While most Black Friday 2014 ads state that Black Friday 2014 sales start on Thanksgiving Day, we are already seeing more than 20 Black Friday sales that are live online and even several that launched in stores. The...
Read more on Celebrity Balla
 
Tori Spelling wants to display breast implants
Tori Spelling wants to get her breast implants removed and display them in a glass dome on her wall. The 41-year-old reality TV star is keen to have her fake boobs taken out because they have ''expired and recalled''...
Read more on Celebrity Balla