By Ben Fox Rubin
Time Warner Cable Inc.'s (TWC) fourth-quarter profit fell 9% as the cable television provider saw higher costs and taxes mask improved revenue.
The company also raised its quarterly dividend to 65 cents a share from 56 cents.
Like its peers, Time Warner Cable's video business faces a soft economy and competition from the likes of Verizon Wireless's FiOS service. As a result, cable distributors are focusing more on expanding their broadband cable and business services units, where profit margins tend to be higher because they don't face the high programming costs associated with the video operations.
Time Warner Cable's core video subscriber business lost 129,000 subscribers from the third quarter, while the company acquired 75,000 broadband subscribers. It gained 34,000 voice subscribers.
Revenue from residential services, which comprises the biggest chunk of the company's revenue, increased 6.8% to $4.58 billion. Meanwhile, business services revenue jumped 26% to $515 million, while advertising revenue rose 29% to $313 million.
The company posted a profit of $513 million, or $1.68 a share, compared with $564 million, or $1.75 a share, a year earlier. Stripping out restructuring costs, some tax impacts and other items, the company saw per-share earnings of $1.57 versus $1.38 a year ago.
Revenue increased 9.9% to $5.49 billion.
Analysts polled by Thomson Reuters expected a per-share profit of $1.55 a share and revenue of $5.5 billion.
Total costs and expenses jumped 8.9%. Income tax provisions rose to $257 million, from $54 million a year ago.
Shares closed Wednesday at $100.70 and were inactive premarket. The stock is up 1.6% over the past three months.
Write to Ben Fox Rubin at [email protected]
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