Time Warner Cable cuts revenue forecast after CBS blackout

The Time Warner Cable office is shown in Carlsbad, California November 5, 2012. REUTERS/Mike Blake·Reuters
Reuters
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(Reuters) - Time Warner Cable Inc cut its full-year revenue growth forecast after losing more video customers than analysts had expected from a month-long blackout of No. 1 U.S. broadcaster CBS Corp.

Time Warner Cable, which also posted an unexpected decline in internet customers in the third quarter, said it expected full-year revenue to grow 3 percent to 3.5 percent, down from its previous forecast of 4 percent to 5 percent.

The second-largest U.S. cable operator posted third-quarter revenue that missed analysts' estimates after losing 304,000 video customers on a net basis, more than the 182,100 expected by Wall Street, according to research firm StreetAccount.

CBS went dark on Time Warner Cable systems on August 2 in New York, Los Angeles, Dallas and other cities as the two companies bickered over content carriage fees. The network returned when the two sides settled their differences on September 2.

Credits issued to subscribers to compensate for the temporary blackout of CBS's Showtime channel cut Time Warner Cable's video revenue for the third quarter by about $15 million.

The company's quarterly results were also hit by a drop in internet customers, which are becoming an increasingly important source of growth for U.S. cable operators in the face of declining TV subscriptions and rising programming costs.

Time Warner Cable said it lost 9,000 high-speed internet customers on a net basis in the third quarter. Analysts had expected 61,500 additions, according to StreetAccount.

Net income attributable to Time Warner Cable dropped to $532 million, or $1.84 per share, in the third quarter ended September 30 from $808 million, or $2.60 per share, a year earlier.

Excluding items, the company earned $1.69 per share.

Revenue rose about 3 percent to $5.52 billion.

Analysts on average had expected earnings of $1.65 per share on revenue of $5.54 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bangalore and Liana Baker in New York; Editing by Ted Kerr and Robin Paxton)

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