PHILADELPHIA — Time Warner Cable Inc., the nation's second-largest cable TV company, said Thursday that first-quarter earnings rose by about 30 percent as it added more Internet, phone and digital cable TV customers.
The company also had a more than 19 percent increase in revenue from advertising in a wide range of categories, most significantly automotive. It also charged higher prices for its cable TV service.
"We're off to a great start for 2010. It's been quite a few quarters since we've been able to deliver such positive news," said Chief Executive Glenn Britt in a conference call with analysts.
Like Comcast Corp., which reported a 12 percent increase in first-quarter earnings on Wednesday, Time Warner Cable is starting to see an upturn in the economy as consumers become more comfortable spending on nonessentials such as entertainment. On a conference call with analysts, the company expressed confidence that it will meet or exceed its earnings expectations for the year.
Time Warner Cable earned $214 million, or 60 cents per share, in the first quarter. That compares with a profit of $164 million, or 48 cents per share, in the same quarter a year earlier.
Revenue rose more than 5 percent to $4.6 billion from $4.36 billion. Analysts surveyed by Thomson Reuters expected revenue of $4.56 billion and earnings of 74 cents per share.
The company said it's on track to meet or exceed its full-year outlook, which includes earnings of $3.25 per share to $3.50 per share. Analysts are expecting $3.47 per share.
Free cash flow, a key metric of cable companies because they tend to pile on debt, soared by 78 percent to $652 million.
Shares of Time Warner Cable rose $3.98, or 7.5 percent, to $57.11 in afternoon trading and earlier hit a 52-week high of $57.58.
Standard & Poor's analyst Tuna Amobi lowered his rating to "Buy" from "Strong Buy," noting that the stock has risen by more than a third year-to-date and further gains might be more moderate. But he remains bullish on the company, encouraged by the pace at which it has added new customers in the quarter, especially in its residential Internet and phone services. Meanwhile, the company continues to make gains in selling its services to businesses.
However, Time Warner Cable continued to lose video customers to competitors. The number of video customers fell by 42,000 in the quarter compared to a gain of 36,000 in the 2009 quarter, but last year's tally was inflated by an influx of new customers as a result of the national shift to digital TV.
Cable companies have been losing subscribers to satellite TV providers and phone companies that offer video. In the fourth quarter of the prior fiscal year, the company had said that the economy continued to weigh on its customers, who cut back on their subscriptions of premium movie channels and ordered fewer videos on demand.
Among the video subscribers remaining, 102,000 signed up for digital cable TV service in the quarter. That's down from 121,000 last year.
Time Warner Cable, based in New York, also added 212,000 residential Internet customers and 86,000 home phone subscribers. Those were lower than last year's gains of 225,000 Internet and 166,000 phone customers.
The average monthly video bill came to $71.24, up 4.7 percent, while customers on average paid $42.35 a month for Internet service. That's up 2 percent from a year ago. Monthly phone revenue fell by 1 percent, however, to $38.54.