On the bright side: Time Warner Cable saw strong growth in broadband subs. But Q2 won’t go down as a quarter to remember for the No. 2 cable company, in the process of being acquired by Comcast. It reported net income of $499M, +3.7% vs last year, on revenues of $5.73B, +3.2%. The revenue number came close to the Street’s target of $5.74B. But diluted earnings at $1.89 a share fell short of expectations for $1.91.
Some of the weakness was due to the double whammy of increased programming costs — including for SportsNet LA, launched this year — while the number of residential video subs declined by 152,000 since March to 11.0M. Video revenues fell 4.8% to $2.55B while programming costs increased 3.9% to $1.3B. The declines were somewhat offset by price increases.
The broadband business carried the company. It added 67,000 subscriptions for a total of 11.4M while revenues increased 12.8% to $1.6B. TWC also added 79,000 phone customers, ending the quarter with 4.9M, although revenues slipped 5.2% to $490M. Looked at another way, the number of single and double play customers declined while the number of triple play subs increased for a total of 14.5M customer relationships, down 34,000.
CEO Rob Marcus says TWC “delivered the best second quarter subscriber volumes in years” as it “made terrific progress on our strategic and operating initiatives.” The company is “working hard to complete our merger with Comcast.”