Time Warner Cable Inc. Earnings: Strong Margins Continue as Net Income Rises

S&P 500 (NYSE:SPY) component Time Warner Cable Inc. (NYSE:TWC) reported net income above Wall Street’s expectations for the first quarter. Time Warner Cable, together with its subsidiaries, is a cable operator in the United States.

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Time Warner Cable Earnings Cheat Sheet for the First Quarter

Results: Net income for the cable TV rose to $382 million ($1.21 per share) vs. $325 million (93 cents per share) in the same quarter a year earlier. This marks a rise of 17.5% from the year-earlier quarter.

Revenue: Rose 6.4% to $5.13 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Time Warner Cable Inc. reported adjusted net income of $1.30 per share. By that measure, the company beat the mean estimate of $1.22 per share. Analysts were expecting revenue of $5.13 billion.

Quoting Management: Time Warner Cable Chief Executive Officer Glenn Britt said: “Time Warner Cable’s first quarter results reflect continued strong performance, and residential Internet and business services were standouts. Now that we have closed the Insight acquisition, our increased cash flow is available to fuel further investments in the business and capital returns to our shareholders.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding, as the company’s gross margin expanded 0.2 percentage point from the year-earlier quarter to 53.2%. Over that span, margins have grown, on average, 0.8 percentage point per quarter on a year-over-year basis.

Revenue has increased for four consecutive quarters. Revenue increased 4% to $4.99 billion in the fourth quarter of the last fiscal year. The figure rose 3.7% in the third quarter of the last fiscal year from the year earlier and climbed 4.4% in the second quarter of the last fiscal year from the year-ago quarter.

The company has beaten estiamtes for two quarters in a row. In the fourth quarter of the last fiscal year, it topped expectations with net income of $1.39 versus a mean estimate of net income of $1.21 per share.

Net income has increased 27% year-over-year on average across the last five quarters. The biggest gain came in the first quarter of the last fiscal year, when income climbed 51.9% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from $1.38 a share to $1.41 over the last ninety days. For the fiscal year, the average estimate has moved up from $5.48 a share to $5.62 over the last sixty days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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