Time Warner Cable the cable company awaiting regulatory approval to merge with Comcast reported profit behind analysts’ estimates as more video subscribers canceled service and programming costs rose.
Time Warner Cable lost 184,000 video customers in the third quarter, while rising costs for sports programming cut into profit. The company lowered its revenue forecast for the year to $22.8 billion, below every analyst estimate compiled by Bloomberg.
Time Warner Cable and Comcast are relying more on broadband users for revenue growth as new TV subscribers prove harder to come by. Netflix Inc.’s streaming service and HBO’s upcoming online subscription are going after younger viewers who prefer to watch shows over the Web rather than paying $50 a month or more for traditional cable.
A year ago, Time Warner Cable reported losses of 306,000 customers for video and 24,000 for broadband. In the most recent quarter, the New York-based company added 92,000 high-speed Internet subscribers, according to a statement today.
Time Warner Cable’s net income fell to $499 million from $532 million a year earlier. Sales rose 3.6 per cent to $5.71 billion, below analysts’ average projection of $5.75 billion.
Programming and content expenses climbed 9.6 percent to $1.3 billion in the quarter because of costs for the SportsNet LA channel that carries Los Angeles Dodgers baseball games. In July, the company had to reduce its full-year profit forecast because it was unable to get rival TV distributors to pay the fees it was asking for the sport network.