Cable Crushing Telcos In Broadband Wars

Time-Warner Cable (TWC) yesterday morning reported first quarter revenue of $3.9 billion and EPS of 28 cents a share, slightly short at the top line compared with Street expectations of $3.94 billion, but topping the consensus profit view of 24 cents. The company also repeated its previous 2007 guidance for revenue and OIBDA (operating income before depreciation and amortization) growth in the mid-to-high 30s.

Joseph Stein, an analyst with UBS, noted yesterday that the company’s 910,000 increase in revenue generating units beat his estimate of 797,000, as the company grew all of its subscription businesses faster than expected.

Craig Moffett, an analyst with Bernstein Research, says the company’s unit growth numbers were “spectacular,” especially high-speed data and VoIP. He noted that weakness at the topline reflect a whiff on advertising - ad revenues were 24% below his forecast. The same thing happened to Comcast (CMCSA).

Moffett notes that net additions of broadband customers were up 18% for Time Warner; Comcast had reported 10% growth. But he notes that DSL providers are not doing well: net addition growth in the quarter was down 23% at Verizon (VZ), 12% at AT&T (T) and 16% at Qwest (Q). Says Moffett: “Cable is, to be blunt, winning the broadband wars.”

Time Warner Cable yesterday was up 78 cents at $37.