"For now, the macroeconomic factors that are most relevant to our residential subscription business remain sluggish at best," chairman and CEO Glenn Britt said on this morning's earnings call while calling out attention to continued high rates of home foreclosures and vacancies.
That was summed up in TWC's subscriber results, with the MSO adding 117,000 revenue generating units (RGUs) in the third quarter, versus 522,000 a year ago. It also lost 84,000 basic subs, in line with analyst expectations. However, the MSO came in short in two of the three other service categories during the quarter, with high-speed Internet as a bright spot:
Table 1: Sub Counts
|Category||Q3 Residential Subscriber Additions||Analyst Expectations|
|Source: TWC, Thomson Reuters, Sanford Bernstein|
Despite missing some of those targets, the MSO still managed to hold the line financially, with revenues of $4.5 billion, up 4 percent year-over-year. Net income fell 11 percent to $268 million, or 76 cents per share, in-line with what analysts were expecting. (See TWC Reports Q3.)
The silver lining was that TWC managed to keep costs in check, with capital spending down 13.3 percent versus last year. It also chopped $436 million from its debt load.
"We believe that we [will] remain competitive for the foreseeable future without dramatic changes to our capital spending," Britt said.
But business [services] is up
Although TWC's residential business is dragging a bit in this economy, the commercial side of the house is still improving.
The commercial segment saw revenues grow 15 percent, to $236 million. Although TWC's commercial business accounted for just 5 percent of total revenues, it contributed about 19 percent of total growth in the third quarter, MSO CFO Robert Marcus said.
TWC's commercial business ended the quarter with 2,300 employees, 21 percent more than the year-ago period, TWC COO Landel Hobbs said. He also shed some light on TWC's cell backhaul strategy, noting that it accounted for $7 million in the third quarter. Today, TWC has more than 2,000 towers in service, with another 2,300 ordered and pending installation, he said.
Other tidbits from today's call:
— Jeff Baumgartner, Site Editor, Cable Digital News