Time Warner Cable Inc. (TWC - Analyst Report) reported better-than-expected financial numbers in the fourth quarter of 2015 wherein both the top line and the bottom line surpassed the Zacks Consensus Estimate.
Quarterly GAAP net income came in at $486 million or $1.70 per share compared with $554 million or $1.96 per share in the prior-year quarter. Quarterly adjusted (excluding special items) earnings per share of $1.80 beat the Zacks Consensus Estimate of $1.79.
Quarterly total revenue came in at $6,072 million, up 4.9% year over year and ahead of the Zacks Consensus Estimate of $6,034 million.
Quarterly adjusted operating income before depreciation and amortization (OIBDA) fell 0.4% year over year to $2,132 million. Also, operating income declined 8.2% year over year to $1,125 million.
In the reported quarter, Time Warner Cable generated $1,883 million of cash from operations compared with $1,810 million in the year-ago quarter. Free cash flow in the fourth quarter of 2015 was $883 million against $891 million in the prior-year quarter.
At the end of fourth-quarter 2015, Time Warner Cable had $1,170 million in cash and cash equivalents compared with $707 million at the end of 2014. Total long-term debt stood at $22,497 million against $22,604 million at 2014-end. At the end of the reported quarter, the debt-to-capitalization ratio stood at 0.71 in comparison to 0.74 at the end of 2014.
Residential Services Segment
Quarterly total revenue was $4,811 million, up 4.6% year over year. Within the segment, video revenues totalled $2,471 million, up 0.3% from the prior-year quarter. High-speed data revenues were $1,819 million, up 10.6% year over year. Voice revenues came in at $497 million, up 5.7% year over year. Other revenues were $24 million, up 4.3% from the year-ago quarter.
Subscriber Statistics: In fourth-quarter 2015, video subscriber count decreased by 54,000 to 10.821 million. High-speed data subscribers rose by 281,000 to 12.675 million. Voice subscriber tally increased 227,000 to 6.320 million. Single-play added 43,000 to reach 5.752 million while double-play subscribers lost 48,000 to 4.067 million. The triple-play customer base added 205,000, taking its total count to 5.310 million.
Business Services Segment
Quarterly total revenue stood at $864 million, up 14.4% year over year. Within the segment, video revenues were $99 million, up 6.5% year over year. High-speed data revenues grossed $430 million, up 19.1% year over year. Voice revenues totalled $157 million, up 13.8% from the fourth quarter of 2014. Wholesale transport revenues were $128 million, up 14.3% year over year. Other revenues came in at $50 million, up 2% year over year.
Subscriber Statistics: In fourth-quarter 2015, video subscriber count increased by 4,000 to 214,000. High-speed data subscribers rose by 16,000 to 638,000. Voice subscriber tally went up 12,000 to 375,000. Single-play subscribers increased 6,000 to 362,000 while double-play subscribers added 10,000 to reach 305,000. The triple-play customer base added 2,000, taking the total count to 85,000.
Other Operational Segment
Quarterly total revenue at the segment was $464 million, down 6.8% year over year. Within the segment, advertising revenues grossed $284 million, down 14.5%. Other revenues totalled $180 million, up 8.4% year over year.
Recent Developments
In May 2015, Charter Communications Inc. (CHTR - Analyst Report) reached an agreement to buy Time Warner Cable. The total value of the deal stands at $78.7 billion, including debt. Taking into account Time Warner Cable's diluted shares outstanding as of Mar 31, 2015, the stock portion of the deal has been pegged at $55.76 billion.
Notably, the U.S. pay-TV industry is at present witnessing a series of consolidations. AT&T Inc. (T - Analyst Report) has acquired satellite TV operator DIRECTV. Moreover, European cable TV operator Altice N.V. has decided to acquire Cablevision Systems Corp. (CVC - Analyst Report).
Time Warner Cable currently carries a Zacks Rank #3 (Hold).
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