Time Warner Cable (NYSE:TWC) posted its fourth quarter earnings on Thursday, Jan. 28. Investors had reason to expect good news from the cable giant, given that it had already announced residential video subscriber growth in 2015 after enduring nine years of a shrinking customer base.

Yet the quarterly figures still edged Wall Street expectations on both the top and bottom lines.

Here's a look at how the results stacked up against the prior-year period:

 

Q4 2015 Actuals

Q4 2014 Actuals

YoY Growth

Revenue

$6.1 billion

$5.8 billion

4.9%

Adjusted Net Income

$517 million

$577 million

(10.4%)

Adjusted EPS

$1.80

$2.03

(11.3%)

Source: TWC financial filing

What happened this quarter?
Revenue was up 5% year-over-year, the company's best fourth quarter showing in that metric since 2010. The boost was powered by a return to growth in the cable business as Time Warner added a robust 54,000 subscribers. Other highlights of the quarter included:

  • Adding 281,000 high-speed Internet customers, easily its best performance since 2009.
  • Notching a 10% boost in high-speed data revenue thanks to a growing customer base and higher prices and equipment fees.
  • Total average revenue per user (including cable, Internet, and phone relationships) ticked up 1% to $128 per month.
  • Operating expenses jumped 8% higher, powered by a 10% boost in programming costs. As a result, profitability declined to 35% of sales from 37% a year ago.
  • Customer service gains included significant declines in required technician calls and in service appointments, which helped reduce cancellations.
  • For the year, capital expenditures rose 9% to $4.4 billion as Time Warner spent aggressively on improving network reliability, upgrading equipment, and building out its reach.

What management had to say
CEO Rob Marcus pointed to the company's investments in products, technology, and customer service as drivers for the quarter's impressive results. "I'm incredibly proud of everything we achieved this quarter and in 2015," he said. "We made our network more reliable, our products more compelling, and our customer service better."

In an accompanying investor presentation, the company illustrated how sharply its customer additions improved over each of the last six fourth quarter periods:

G

Customer additions for every Q4 since 2009. Source: TWC investor presentation

Looking ahead, the management team is focused on continuing to make positive strides in customer service categories like required technician visits and subscriber phone calls to tech support. Time Warner has seen its cancellation rates plunge in markets where it has achieved better results in these metrics. Cable subscribers have, on average, stuck around longer thanks to initiatives like its new app that helps customers diagnose tech issues without needing to schedule an in-person repair visit.

The company believes it can deepen those gains and extend them to other markets in the coming year. Once that customer experience improvement takes hold, Time Warner should be in a stronger position to start passing along more of the rising programming and capital expense costs that are eating into its profitability.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.