(Reuters) - Time Warner Cable Inc TWC.N, the second-largest U.S. cable TV operator, reported a 3.8 percent rise in revenue as residential customers bought more service bundles, leading to fewer-than-expected video cancellations.
Time Warner Cable lost a net 38,000 residential video customers in the quarter, less than half the 103,000 that market research firm StreetAccount had estimated and fewer than the 184,000 customers it lost previous quarter.
Time Warner Cable, however, reported quarterly revenue and profit below the average analyst estimate.
The company’s shares were down marginally at $138.63 in morning trade on the New York Stock Exchange on Wednesday.
The cable TV operator has been bleeding customers, who are switching to internet streaming services offered by companies such as Netflix Inc (NFLX.O).
To retain customers, Time Warner is increasingly offering a bundle of TV, Internet and phone services.
“The larger the bundle, the stickier the customer,” MoffettNathanson LLC analyst Craig Moffett said.
The company does not release the number of customers opting for bundles, but the addition of fixed-line customers indicate adoption of more bundles.
Time Warner Cable added 295,000 residential voice customers in the quarter compared to 1,000 in the same period last year. Analysts had expected additions of 30,000 customers in the quarter.
“It might seem like the company is giving voice away, but that is probably exactly what they should be doing,” Moffett said.
Net income attributable to common shareholders rose to $554 million, or $1.95 per share, from $540 million, or $1.89 per share. On an adjusted basis, the company earned $2.03 per share.
Revenue rose to $5.79 billion from $5.58 billion.
Analysts on average had expected earnings of $2.08 per share on revenue of $5.81 billion, according to Thomson Reuters I/B/E/S.
Reporting By Subrat Patnaik in Bengaluru; Editing by Don Sebastian