Time Warner Cable doesn’t tip hand on merger talks

For Time Warner Cable, old school is new again.

The cable giant released its first-quarter profit Thursday -- just one week after its $45-billion takeover bid by Comcast Corp. collapsed under mounting pressure in Washington from federal regulators.

Wall Street analysts who were wondering whether Time Warner Cable was poised to quickly strike another deal, perhaps this time with Charter Communications, didn’t get clarification during an early morning conference call.

Time Warner Cable Chief Executive Robert D. Marcus reportedly is meeting with his counterpart at Charter next week to discuss options. But on Thursday, Marcus said the company would not comment on such talks.

He also indicated his company was fine flying solo right now.

“We feel great about the spot we are in. ... We are about as well positioned for the future as it gets,� Marcus said on a conference call. “We are a far stronger company than we were just five short quarters ago.�

Five quarters ago the company was on the ropes, a beleaguered takeover target following a bruising 18 months that saw an exodus of subscribers. Charter was circling and Time Warner Cable reached out to Comcast as a preferred suitor as the industry prepared for a wave of consolidation.

“Today’s report will likely leave investors guessing,� Craig Moffett of the MoffettNathanson research firm wrote Thursday in a report. “With no counter-bidder in Comcast to help them negotiate a better deal this time, TWC’s best leverage is a legitimate willingness to say ‘no.’�

Time Warner Cable missed Wall Street estimates.

For the quarter ended March 31, Time Warner Cable said its profit was down 4.4% to $458 million, or $1.59 a share, compared to $479 million, or $1.70 a share, in the year earlier period.

Analysts had anticipated earnings per share of $1.87.

But there was plenty of good news. Revenue grew 3.5% to $5.8 billion.

The company celebrated its best first quarter ever in terms of subscriber growth by adding 30,000 new cable TV subscribers -- its best result in five years.

It signed up 315,000 residential high-speed Internet customers and added 320,000 land-line phone customers. Overall, the company had its best quarter ever with an addition of 205,000 new customer relations.

“Our performance is improved against all competitors,� Marcus said. “Our connects are up and our disconnects are down.�

The company’s first-quarter report “seems to make a case for TWC staying independent, at least for a while, while they reap the benefits of this newfound growth,� the analyst Moffett said.

Time Warner Cable has been spending heavily to improve Internet speeds and the reliability of its network. The company downplayed another trend, the popularity of so-called “skinny� bundles of cable TV channels that some of its competitors, including Dish Network and Verizon, have embraced.

Time Warner Cable will not be a pioneer in that realm, company executives said. If other firms have success with skinny bundles that offer a smaller number of channels, then TWC will adopt the practice.

For now, Time Warner Cable said it was content to watch those moves play out.

Marcus also said that the significance of consumers under 35, a group often referred to as millennials, and their preferences to consume most of their entertainment online, has been somewhat overstated.

“There is an obsessive interest in millennials, maybe at the expense of the broader customer base,� Marcus said. “For most of our cable subscribers, the way we deliver our video product is pretty darn attractive.�

Time Warner Cable’s earnings continue to be pinched by the Dodger channel debacle in Los Angeles. The cable company is losing more than $100 million a year on its contract with Dodger team owners, Guggenheim Baseball Management, and those losses prompted the company to reduce its full-year earnings estimates.

“We do not have a Dodgers deal [with other pay-TV providers] at this point and that certainly has an impact,� Chief Financial Officer Arthur Minson said.

Time Warner Cable has said it will not take a write-down to adjust for the value of that deal. The Dodgers and Major League Baseball have said that TWC’s contract to distribute the Dodgers is worth $8.35 billion over 25 years.

Executives acknowledged that the Dodger channel, which is called SportsNet LA, and the launch of the SEC network helped drive up programming costs 12.2% compared to last year. Even without those two pricey channels, programming costs companywide were up more than 10%.

The company also mentioned high pension costs.

Time Warner Cable said it spent $26 million on merger related costs during the quarter.

Twitter: @MegJamesLAT