April 30, 2009, 8:06 AM — Time Warner Cable, who recently claimed it needed to introduce tiered bandwidth pricing in order to continue to invest in upgrading infrastructure for its customers, released its financial results yesterday. Oddly enough, the story they tell investors doesn't quite fall in line with what they were saying to customers.
The numbers are publicly available in this pdf and Wired breaks them down in an article from last night, but let's look at a few highlights.
The cost of providing broadband to its customers was $40 million in Q1 2008; in Q1 2009 the cost had dropped to $33 million. During the same time periods, Time Warner Cable went from having 7.9 million subscribers to having 8.6 million. Revenue for that quarter was $1.1 billion ($994 million in Q1 2008) with a net profit of $164 million.
And here's a quote from Time Warner Cable Chief Executive Officer Glenn Britt: "Cable is a very good business, and our operations are strong and growing despite a challenging economy. We continue to generate very healthy free cash flow which will enable us to reduce debt over the next year."
So costs are dropping, customer numbers are rising, revenue is rising, the company is profitable, generating a healthy cash flow, reducing debt and...telling customers that they have to pay more if they want their internet service to continue working (remember, they issued dire warnings of 'internet brownouts' if they didn't get their tiered pricing structure).
If you want to catch up with the saga of Time Warner Cable's recent dealings, here's a list of posts I've done, in chronological order:
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