Price hikes for Internet and the company’s growing attention to business customers saved the day for Time Warner Cable in Q1 as its video subscriptions fell and it grappled with rising costs for programming and its planned merger with Comcast. TWC shares are up about 2% pre-market after the No. 2 cable operator reported net income of $479M, +19.5% vs the period last year, on revenues of $5.58B, +2%. Analysts expected the top line to come in higher at $5.64B. After factoring out one-time costs, including merger-related expenses, earnings came in at $1.78 a share, a dime ahead of the consensus forecast. The period included $62M in expenses tied to Comcast’s $42B takeover effort, including $29M in “employee retention costs” and $33M in advisory and legal fees. Programming costs rose 2.9% to $1.3B, including costs associated with TWC’s LA regional sports channels for the Lakers and Dodgers. But with 11.16M video subs at the end of March — down 748,000 vs last year and -34,000 from the end of December — the average monthly programming costs per residential sub increased 10.2% to $37.69. (By contrast, Comcast eeked out a small increase in video subs in Q1.)
Total revenues for residential customers fell 0.9% to $4.57B, and would have been worse had it not been for “increases in prices and equipment rental charges” and sub growth in the broadband business. Business services revenues were up 24.4% to $668M. CEO Rob Marcus says he’s “very pleased with our performance this quarter” adding that they “underscore our commitment to deliver on our financial and operating plan as we prepare for our merger with Comcast.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.