Time Warner Cable posts strong earnings on robust high-speed internet segment

on Thursday, January 26, 2012

Time Warner Cable posts strong earnings on robust high-speed internet segmentTime Warner Cable's earnings impressed analysts this week, as the company said its net profit surged 44 percent in its latest fiscal quarter.

Time Warner is seeking to command an ever-larger piece of the high-speed internet market in the U.S., which is exceedingly lucrative for many businesses. The company is one of the biggest cable television providers, but its march into the high-speed internet market has already begun to pay off, experts said.

The company posted a net profit of $564 million in its fourth fiscal quarter, which ended December 31, 2011. The company has implemented a successful business cost reduction campaign as a means of improving efficiency, and it has overhauled supply chain management and indirect spend as it strove to improve efficiency.

Time Warner is the second-largest cable provider in the U.S. – trailing only Comcast – and it is hoping to become the dominant firm in the high-speed internet sector. The company's revenue climbed 4 percent in its latest quarter, hitting $5 billion. The uptick in revenue was fueled by the company's rapidly expanding internet service segment, which posted an 8.6 percent rise in revenue.

The company announced earnings prior to the start of trading on Thursday. Time Warner Cable chief executive Glenn Britt affirmed the positive earnings underscored the company's successful expansion in the high-speed internet market. He said the firm is poised for growth in 2012, and that it expects earnings to remain robust this year.

"Time Warner Cable’s 2011 results demonstrate the continued strength of our business amidst rapid change in technology and the consumer marketplace. We have a full slate of strategic and operational initiatives planned for the year ahead, all designed to generate strong cash flow, enable future growth and provide attractive returns to our shareholders," he said in a statement.

Time Warner Cable also released its full-year financial results on Thursday. For the 2011 fiscal year, revenue jumped 4.3 percent from 2010 to $19.7 billion. The company's business services division also posted stellar growth, as revenue within the segment surged 32.7 percent from the year prior. The company's advertising revenue, however, remained flat at roughly $880 million.

The New York Times reports many cable companies have increasingly moved to tap into the nation's burgeoning market for high-speed internet. The market for cable subscriptions, according to experts, is largely saturated.

 

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