Time Warner Cable Increases Profits Following Strong Internet Subscription Increases

Time Warner Cable Inc. beat analyst predictions for first-quarter profit after attracting more broadband-Internet subscribers than originally predicted.

In the company’s statement on Friday earnings excluding some expenses rose to $1.30 per share, up from $1.01 just one year earlier. The company announced that sales have climbed 6.4 percent to $5.13 billion, beating analysts expectations for $1.25 per share.

As cable-TV sales have decreased Time Warner has shifted much of its attention towards the internet, adding 214,000 new users during the quarter, far exceeding analyst expectations of 175,000 new users.

In comparison Time Warner Cable added just 112,000 residential phone users and 94,000 video customers.

The move away from traditional cable comes at a time when more providers are offering alternatives such as AT&T’s U-Verse and Verizon’s FiOS network. DirectTV has also been eating into Time Warner market share.

On news of the company’s increased internet subscriber rates Time Warner shares rose 1.5 percent to $82.15.

Time Warner also announced that its business-services revenue is up 38 percent for the quarter to $429 million while net income increased 18 percent to $382 million ($1.20 per share). That increase is up from $325 million and $.93 per share.

Warner has also predicted that it could buy back more shares in the company after completing the purchase of Insight Communications on Feb. 29. According to Chief Executive Officer Glenn Britt:

“Now that we have closed the Insight acquisition, our increased cash flow is available to fuel further investments in the business and capital returns to our shareholders.”

Are you surprised by Time Warner Cable’s ever increasing user base in the internet sector?