Financial Highlights of Time Warner Cable’s 3Q15 Earnings

Shirley Pelts
0

Charter Communications and Time Warner Cable See Revenues Rise in 3Q15

(Continued from Prior Part)

Financial performance

On October 29, 2015, Time Warner Cable (TWC) announced its 3Q15 results. The company reported revenues of $5.9 billion. Revenues have risen by 3.6% over the same quarter last year.

Time Warner’s adjusted OIBDA (operating income before depreciation and amortization) of ~$2 billion fell by 3.6% over the same quarter last year. The reason for this fall was a rise in programming costs and pension expenses. The company had an operating income of $1 billion, a fall of 13% over 3Q14. The fall in operating income was due to a rise in depreciation expenses from TWC Maxx.

Time Warner Cable had a positive free cash flow of $441 million, a rise of 19.8% over the same quarter last year.

Time Warner Cable reported a diluted EPS (earnings per share) of $1.53 and an adjusted diluted EPS of $1.62. The company’s adjusted diluted EPS excludes the impact one-time, non-cash charges including goodwill impairment and restructuring costs. The company’s adjusted diluted EPS exceeded consensus Wall Street analysts’ expectations by 3.2%.

Segment results

The company’s Residential Services segment had revenues of $4.7 billion in 3Q15, a growth of 2.6% over 3Q14. Adjusted OIBDA for this segment was $2.1 billion, a fall of 1.8% over 3Q14.

Residential revenues for high-speed Internet rose by 9.4% over 3Q14 to $1.7 billion. The reason for the rise in high-speed Internet revenues was due to an increase in subscribers and a rise in average revenue per subscriber.

Residential video revenues were $2.5 billion in 3Q15 due to a fall in video subscribers by 7,000 and a fall in average revenue per subscriber.

The Business Services segment had revenues of $836 million, a growth of 15.5% over 3Q14, and an adjusted OIBDA of $506 million. Adjusted OIBDA rose by ~15% over 3Q14. This revenue growth was primarily driven by a rise in high-speed Internet and voice subscribers and a rise in wholesale transportation revenue.

Time Warner Cable’s advertising revenues fell by 9.1% year-over-year to $251 million in 3Q15 as revenues from political advertising fell. Adjusted OIBDA in the company’s Other segment fell by 24.2% from 3Q14 to $150 million in 3Q15 due to higher content costs.

You can gain diversified exposure to Time Warner Cable by investing in the iShares S&P 500 Growth Index ETF (IVW), which holds 0.37% of the stock. The same ETF also holds 7.0% of Apple (AAPL), 4.3% of Microsoft (MSFT), and 2.4% of Amazon (AMZN).

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