How quickly things can change! Just ask the cable operators. A year ago, the group was flying high, amazing us all with its subscriber additions. But in the most recent quarter or two, as Time Warner Cable (NYSE:TWC) confirmed on Wednesday, the brakes clearly have been applied to that growth.
For the quarter, the company saw a decline of 83,000 basic video subscribers. It's probably far from coincidental that about 80% of those departures occurred in markets like Los Angeles and Dallas, where competition from telephone companies Verizon (NYSE:VZ), and AT&T (NYSE:T), along with satellite video providers DirecTV (NYSE:DTV) and EchoStar (NASDAQ:DISH), has heated up.
One result was that the company's net income was $248 million, which shook out to $0.25 a share. In the year-ago quarter, it earned $1.2 billion, or $1.20 a share. But the prior period included an after-tax gain of $949 million, which was tied to its acquisition of Adelphia cable systems.
But just so you don't think it was a completely sour quarter for Time Warner Cable, the company did add 128,000 digital video subscribers, 275,000 digital phone subs, and 224,000 high-speed data customers. Now almost half of its customers subscribe to at least two services.
The company -- whose parent Time Warner (NYSE:TWX) had an OK quarter, or a down one, depending on which metric you're inclined to focus on -- joined the film unit in propelling the parent's results as far as they went. (The real drag on Time Warner's performance remains AOL.)
The cable unit became a public company in February, when a 16% stake in the segment was used as part of a payment for cable systems acquired from Adelphia. There's growing speculation that Jeff Bewkes, who will probably replace Dick Parsons as Time Warner's CEO in January, will work to complete the cable unit's spinoff.
So, Fools, Time Warner Cable, the second-largest cable operator, joins industry leader Comcast (NYSE:CMCSA) in reporting results that were not completely up to snuff. But as I look at a market that's almost daily bouncing around like a cork in a hurricane, and as I consider cable's recent pullback, I'm less inclined than some to write the group off as a has-been.
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