NEW YORK (AP) - Time Warner Cable Inc. posted a 23 percent jump in its second-quarter earnings Thursday, boosted by strong results in its business services and higher revenue from residential users even as it continued to lose subscribers to its cable TV service.
Like other cable companies, Time Warner has been working on growing its Web-based video service to better compete for customers who are increasingly turning to the Internet to watch movies and television shows. Cable TV providers have been losing subscribers to satellite TV companies and phone-company TV services for years. But in the second quarter of 2010 the overall pay-TV industry lost customers for the first time.
The nation’s second-largest cable company behind Comcast Corp. said its net income rose to $420 million, or $1.24 per share, in the three months ended June 30, up from $342 million, or 95 cents per share, a year earlier. Earnings in the most recent quarter were boosted by a gain of 4 cents per share, but even without it they were better than what analysts had expected.
Revenue rose 4 percent to $4.94 billion from $4.73 billion.
Analysts, on average, were expecting earnings of $1.16 per share on revenue of $4.94 million, according to FactSet.
Glenn Britt, president and CEO, said the company’s core business is healthy, “despite competitive pressures and the continuing weakness in the economy.”
Time Warner Cable’s advertising revenue rose 4 percent to $225 million. Revenue from its largest segment, residential services, climbed nearly 3 percent to $4.3 billion. Business services revenue jumped 35 percent to $361 million.
The company lost about 130,000 residential video subscribers during the quarter, ending the period with nearly 12.1 million _ roughly in line with analysts’ expectations. In the same quarter last year, it lost 111,000. It also gained about 2,000 business video customers.
Time Warner is working on delivering more video content over the Internet, betting that it can stay competitive even as it continues to lose traditional cable subscribers.
The company gained about 67,000 residential and business high-speed Internet subscribers and 45,000 voice subscribers in the latest quarter, but this wasn’t enough to offset the loss of video customers and both figures fell below analysts’ expectations.
Time Warner Cable had announced a $4 billion stock buyback late last year. Nomura Equity Research analyst Mike McCormack estimates that there is about $1.8 billion remaining of the authorization, which would imply two more quarters of the current pace of share repurchases. The company bought back about $863 million of its shares in the second quarter.
Shares of Time Warner Cable fell $2.88, or 3.7 percent, to $74.22 in midday trading. The stock has traded in the 52-week range of $50.41 and $80.86.