Time Warner Cable Net Customer Additions Stronger Than Expected, CEO Says
Time Warner Cable Inc. (TWC)’s customer additions were stronger in August than the company had expected when it reported second-quarter results, said Chief Executive Officer Glenn Britt. Shares rose the most in 11 months.
Britt said the company was showing “relative strength” in net additions of video, voice and high-speed data customers compared with 2010. He estimated further growth in September, when seasonal trends including students leaving for college and the beginning of the football season lead to more subscriptions.
“We’re doing a lot better than we thought back in the second quarter,” said Britt, speaking at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills, California.
The second-largest U.S. cable company lost 130,000 residential video subscribers, while adding 54,000 residential broadband customers in the second quarter, lower than some analyst estimates. Chief Operating Officer Rob Marcus said during the company’s conference call in July that the company saw “weakness” continue into the early part of the third quarter. Time Warner Cable shares had fallen 16 percent before today since the earnings report on July 28.
Time Warner Cable rose $2.67, or 4.3 percent, to $64.65 at 4 p.m. in New York Stock Exchange composite trading, the largest one-day gain since Nov. 4. Rivals Charter Communications Inc. (CHTR) and Cablevision Systems Corp. (CVC) also rose on the news.
“It could be that cable and media businesses are remaining resilient despite what’s gone on in financial markets and consumer sentiment,” said Jaison Blair, an analyst at Telsey Advisory Group in New York. “The cable stocks have sold off a lot, they’re all buying back shares, and these are still very high-quality businesses.”
Cablevision, the fifth largest U.S. cable company by subscribers, gained $1.16, or 7 percent, to $17.83 at 4 p.m. on the New York Stock Exchange. Shares have fallen 25 percent this year.
Charter, the fourth-largest U.S. cable company by subscribers, rose $1.59, or 3.3 percent, to $49.23 in Nasdaq Stock Market trading.
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