A Sneak Peak At Time Warner Cable Ahead Of Q3 Report

(RTTNews) - From Time Warner Cable Inc. (TWC), analysts polled by Thomson Reuters are expecting earnings of $1.57 per share on revenue of $5.96 billion for the third quarter. The results are due to be released before the market open on Thursday, October 29.

The company believes that its more intensive investment this year will drive stronger operating and financial results in 2016 and beyond.

In the previous quarter, the company reported a 7% decline in profit from last year, as higher revenues were more than offset by an increase in expenses, including programming costs. Both revenue and adjusted earnings per share for the quarter missed analysts' estimates.

Second-quarter net income attributable to shareholders was $463 million or $1.62 per share, down from $499 million or $1.76 per share in the previous-year quarter.

The decline in net income was primarily due to a decrease in operating income and an increase in income tax provision. These were partially offset by an increase in other income, which included a $120 million gain from the settlement of certain terms of an agency agreement with Verizon Wireless.

Adjusted earnings were $1.54 per share, compared to $1.89 per share in the same period of last year. On average, 19 analysts polled by Thomson Reuters expected earnings of $1.81 per share for the quarter. Analysts' estimates typically exclude certain special items.

Revenue for the quarter rose 4% to $5.93 billion from $5.73 billion in the prior year, reflecting revenue growth at the Business Services and Residential Services segments. Analysts expected revenues of $5.94 billion.

The company gained 66,000 residential customer relationships in Q2, making this the best second quarter ever. Residential video net declines during the quarter were 45,000, due to seasonal headwinds. However, that was more than 100,000 better than a year ago and the best second quarter performance since 2008.

Meanwhile, residential high-speed data net additions were 172,000, representing the best second quarter since 2008, while residential voice net additions totaled 252,000, the best second quarter ever.

In Late-May, Charter Communications agreed to acquire Time Warner Cable Inc. in a cash-and-stock deal. Including debt, the deal valued Time Warner Cable at $78.7 billion. Bright House Networks LLC, a smaller cable operator that Charter was trying to buy, would also be merged into the combined entity.

Last month, shareholders of Time Warner Cable and Charter Communications have approved the deal. This merger would result in faster broadband speeds, better video products, including more high definition channels, more affordable phone service and more competition, for consumers and businesses.

Earlier this month, DISH Network Corp. (DISH) urged the Federal Communications Commission or FCC to deny the proposed merger of Charter Communications Inc. (CHTR) with Time Warner Cable, citing substantial harm to competition and consumers.

DISH noted that the proposed transaction would be no better for the public interest than the one proposed between Comcast and Time Warner Cable. Where a Comcast/Time Warner Cable merger would have created one behemoth, this transaction will result in two broadband providers (Comcast and New Charter) controlling about 90% of the nation's high-speed broadband homes between them.