Cable, high-speed internet and voice service provider Time Warner Cable reported a 34 percent decline in third-quarter profit.
The culprit of the earnings dip is the the company's dispute with CBS that resulted in a month-long blackout of several channels for more than 3 million homes in New York, Dallas and Los Angeles. This led the company to issue $15 million in credits to Showtime subscribers facing the blackout as that network along with The Movie Channel and The Smithsonian Channel became unavailable. In its biggest loss of customers ever, Time Warner Cable lost more than 300,000 TV subscribers. Results were worse than Wall Street analysts expected and reminded many of the risk a cable provider runs into when in dispute with networks. Time Warner Cable's dispute with CBS Corp comes from both companies failing to reach an agreement on fees.
It also didn't help that competition from Netflix, Hulu and other streaming TV providers are becoming extremely fierce. Last month, Netflix reported eclipsing HBO's domestic subscribers.
Adam Ilkowitz, analyst for Nomura, was "shocked" by the figure.
"We hope to hear more on how TWC will get back up," wrote Ilkowitz in a note to clients.
Though Time Warner suffered on the cable front, total revenue grew about 3 percent to $5.52 billion from $5.36 billion thanks to growth in business services and residential high-speed data revenue. The company's average monthly revenue per customer rose about 2 percent as new customers paid more for its services. Time Warner grew its business services revenue over 20 percent for the 14the consecutive quarter.
News comes as Time Warner Cable CEO Glenn Britt announced his retirement following a recent bout with cancer .
"I feel good and am optimistic about my prognosis," Britt told reporters. "I have no intention of letting this cancer slow me down, and will continue to work until my retirement at the end of the year."
As the quarter ended Sept. 30, the New York-based company earned $532 million ($1.84 per share), down from $808 million ($2.60 per share) in 2012 of the same quarter.
