Time Warner saw a decline in their video subscribers.
Time Warner is the United States second largest cable operator company. On Thursday the cable company lost more video subscribers in the third quarter then the previous quarter as more customers prefer internet streaming services offered by companies such as Netflix Inc.
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Shares were higher in premarket trading following the announcement. Time Warner’s third quarter earnings increased by $1.86 per share from $1.69 a share in the year earlier period. As of September 30, Time Warner Cable had 10.8 million household video subscribers, down from 11.4 million a year earlier.
The cable company, which gets more than 80 percent of its total revenue from households, also reported lower than expected sign-ups for its residential voice and high-speed data services.
The cable operator also saw a rise in its revenue from $5.52 billion last year to $5.71 billion this year. Analysis carried out by Reuters had better expectation from the company. It was expected that the company would earn $1.90 per share on revenue of $5.75 million.
Time Warner Cable lost 184,000 residential video customers in the quarter; this was much more than the 136,000 which was estimated by the market research firm StreetAccount. The company announced in October that its stockholders had approved a deal for the company to become a 100 percent owned subsidiary of Comcast.
This merger is about $45 billion and was first proposed in February and is still under regulatory review. Both the companies do not compete directly for customers but in 2011 before the purchase of NBC Universal, Comcast did refer to it as a competitor. Together these two companies would control two-thirds of the broadband cable market, or 40 percent of the US wired broadband market as a whole.
Comcast benefitted from a tax settlement and more high speed Internet customers, this led the company earning more than its expectations and revealed this on Thursday. Time Warner Cable also settled with the Federal Communications Commission in late August, for $1.1 million on charges the company had not reported multiple network outages. A day after the settlement some of the firm’s 15 million customers reported brief service disruptions.
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