Time Warner Cable Beats Expectations In Q1

Time Warner Cable soundly beat analyst expectations in the first quarter, reporting a 5.4% rise in revenue and a 10.9% increase in cash flow, its first double-digit growth performance in that metric in two years.
"We're off to a great start for 2010," Time Warner Cable chairman and CEO Glenn Britt said on a conference call with analysts.
Revenue for the period was $4.4 billion compared to $4.2 billion a year ago, ahead of consensus estimates of about 4% growth. Adjusted operating income before depreciation and amortization was $1.7 billion, a 10.9% increase over the $1.5 billion in the same period in 2009 and soundly beating most analysts' predictions of 5% to 6% growth. It was the first quarter since the fourth quarter of 2007 that Time Warner Cable reported double-digit AOIBDA growth. Free cash flow increased 77.7% to $652 million.
While residential high-speed data and digital phone customers were on the rise (gaining 212,000 and 86,000, respectively, in the period) the main driver for the cash flow gains appears to be a big boost in high-margin advertising revenue (up 19% to $173 million in the quarter) and a 60.3% decline in bad debt expense. Time Warner Cable also lost about 42,000 basic video subscribers in the period.

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