Time Warner Cable Loses Subscribers

The well known cable operator in United States, Time Warner Cable Inc. (NYSE:TWC) failed to keep up with the forecasts made by the Wall Street pushing the shares down by around 10 percent .

Time Warner Cable Inc. lost a large chunk of video customers than it had expected. The company also experienced a loss of phone customers for the first time. The increasing cost of programming along with a drop in subscription of premium video packages are attributed to the reduced profits in the third quarter which failed to meet the expectations , said the second largest cable operator in the united states in a report earlier today.

It is not just Time Warner, but even its rivals have been constantly losing subscribers for video over phone and also satellite providers due to the tough economy and slow housing market which has led to a slowdown of the overall pay television market. Some of the customers have migrated to internet based services like Hulu and Netflix (NASDAQ:NFLX) from the premium video services.

In the third quarter, Time Warner Cable lost more than 128,000 video subscribers in the residential services division but at the same time it managed to add more than 89,000 subscribers to the company’s road and services. In addition to these, it also saw a sharp drop in the phone customers after it lost about 8000 subscribers for the first time ever since the service was launched.

In a statement, the Chief Financial Officer of Time Warner Cable Inc., Irene Esteves said that the company’s outlook on the operating profit is fixed upon a double digit growth but the revenue from advertising may be lesser.

Time Warner Cable fell by $6.05 to $64.58 earlier today in the New York Stock Exchange. The declining customers for the premium video packages seem to have offset the benefits gained by the company from the higher prices for video customers.

In a conference call with the analysts’, the chief operating officer, Rob Marcus said that the company is looking forward to make a renewed push to capture the high speed internet segment by attracting more customers , both fresh and from other networks as well.

Time Warner Cable has posted revenue of $4.91 billion which was slightly below the estimated $4.95. The profits for the third quarter which ended in September had fallen to $356 million of $1.08 a share as compared to $360 million or $1 per share as in the previous year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.