Time Warner Cable plows ahead with 'priorities,' loses 34K video subs

Time Warner Cable (NYSE: TWC) put a positive spin on the loss of 34,000 video subscribers in the first quarter, noting the loss was "the least in five years." The MSO had no need to put any spin on the fact that it added 269,000 residential high-speed subscribers in the quarter, the most since the first quarter of 2008.

For the most part, though, TWC executives tread a fine line between what they will be around to achieve in the future--and what they've accomplished in the present--and what will be out of their hands if Comcast (NASDAQ: CMCSA) is successful in its $45.2 billion bid to acquire the nation's second largest MSO.

CEO Rob Marcus said as much in a company press release where he noted first quarter results "underscore our commitment to deliver on our financial and operating plan as we prepare for our merger with Comcast."

The first quarter produced $5.58 billion in revenue, a 2 percent increase over the $5.48 billion Time Warner announced a year earlier. Those results were negatively impacted by video revenues which fell 6.6 percent to $2.49 billion compared to $2.67 billion in 2013. Voice revenues, too, saw a 4.4 percent drop from $519 million to $496 million.

Internet was positive: up 10.8 percent to $1.56 billion, compared to $1.41 billion in 2013.

Marcus preferred to address the positive aspects of the results, noting that the MSO is making "great progress" towards its announced goal of revitalizing its residential business.

"We added 148,000 residential customer relationships in Q1," Marcus emphasized during prepared comments on a call with analysts. This, he said, is on track with the company's goal of adding a million residential customers by the end of 2016.

Of course that is all relative since, if things go the way Time Warner Cable and Comcast expect, TWC will just be a part of Comcast.

"Time Warner Cable is playing for pride now," MoffettNathanson analyst Craig Moffett wrote about the results. "We may never know what TWC's new management team might have achieved on its own. Long before their turnaround strategies have run their course, TWC will be operating under Comcast's umbrella. If it all works, Comcast will get the credit. If it doesn't it is TWC's legacy that takes the blame."

For the present, Marcus credited his existing team.

"The foundational work we did last year to enhance our subscriber acquisition and retention capabilities is bearing fruit," he said.

Going forward, Marcus promised that TWC would continue efforts to differentiate its product "in ways that matter to our customers."

Among the differentiators is a cloud-based guide, which was added to 1 million set-top boxes in the quarter to bring the total number of boxes with cloud-based technology to 4.3 million. The company expects to have it on 6 million boxes "in coming months," Marcus said.

Also part of the new differentiation strategy is TWC's IP video experience, including a deal to put the TWCTV app on the Fan TV platform.

Finally, joining nearly every MSO, Marcus pointed to the future potential of higher speed data and Wi-Fi.

"Hotspot 2.0 will make our ever-expanding Wi-Fi network more secure and even easier to use," said Marcus. "And I'm very excited about TWC Max, which is off and running in New York City and Los Angeles. Some customers in those cities are already enjoying HSD speed increases to 50 Mbps for standard tier customers and as much as 300 Mbps for higher end subscribers."

For more:
- see this earnings release

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