Notable metrics

Predictions that Time Warner Cable would lose tens of thousands of basic subs in 1Q proved false Wed as the MSO posted 55K net basic video adds—its highest gain in 2 years. A poll of 8 analysts by Reuters had the MSO losing 21K subs. Sanford Bernstein put the Wall St consensus at a loss of 32K. Past problem children L.A. and Dallas had their best sub performance since TW closed on the Adelphia and Comcast transactions in July ’06, though both still posted "modest" basic sub losses. While seasonality played a part in the sub gains, TW also credited stepped-up marketing efforts, including an increased focus on Hispanic HHs. "The effect of the economy on our subscription business appears minimal at this point, although we have seen some modest weakness in regions that have higher unemployment and foreclosure rates," TW Cable pres/CEO Glenn Britt said during the MSO’s earnings’ call Mon. "That said, we remain very comfortable with our ability to manage the business in this environment, and this morning, we reiterated our full-year financial outlook for revenues, OIBDA, and earnings per share." TW also increased its FCF outlook for the year to at least 40%, citing the impact of the Economic Stimulus Act on cash taxes. AT&T and Verizon posted dismal 1Q wireline losses, which helps explain the strong residential phone adds that TW saw. The MSO added 280K, it’s 2nd highest number ever. TW continues to tout the potential of business services, with 1Q commercial service rev growing twice as fast as residential rev, and its new commercial phone biz netted 5K new subs in the Q. With DBS garnering much of the HD attention, TW brass stressed that the MSO is high-def focused as well—though it will stress quality over quantity. TW offers 50 HD channels in large parts of NYC today and expects to have the ability to deliver more than 100 HD channels when it completes the transition to all digital in the city later this year (Brooklyn and Queens have already migrated), COO Landel Hobbs said. "It’s not just New York City," he added. "For example, Albany had 52 HD channels at the end of the first quarter and 5 other service areas had at least 40. You can expect to see these numbers continue to increase throughout 2008.": TW scored an all-time high in triple-play additions, 247K, putting penetration of that bundle at 18%. 7.4mln subs take 2 or more of its primary services, representing 50% of its customer base. Digital video adds totaled 261K, with HD capable subs increasing by a record 418K to 3.4mln (41% of digital base). 44% of digital subs have DVRs, with TW adding 242K during 1Q. HSD adds came in at 304K, marking the 3rd time in the last 3 years that net adds were greater than 300K. More than 100K subs signed up in the Q for TW’s premium HSD service.