Shares are down in pre-market trading after the No. 2 cable operator reported Q1 numbers that were up — but not as much as the Street anticipated due in part to a drop in residential video customers and rising programming costs. Time Warner Cable generated $401M in net income, +5% vs the first three months of 2012, on revenue of $5.5B, +6.6%. The revenue number came close to the consensus forecast, but earnings per share at $1.34 missed predictions for $1.38. The company ended the quarter with about 12M residential video customers, -119,000. Not including subscribers added with the February 2012 acquisition of Insight Communications, video revenues fell 4.9% to $2.6B. The company says that price increases and a rise in sales of extra-fee service tiers were offset by “declines in video subscribers and premium network and transactional video-on-demand revenue.” Video programming costs rose 6.8% to $1.2B, Time Warner Cable says in an SEC filing. The number of residential broadband subscribers rose by 131,000 to 10.9M while phone customers were -36,000 to 5M.
CEO Glenn Britt says that the business services business “continues to perform very well, generating 25% year-over-year growth” and in residential “we’re executing on our revitalization plans to build a fundamentally stronger and more agile operation. As a result, I remain very excited about the long-term prospects for this business.”