Updated Research Report On Time Warner Cable - Analyst Blog

On Jun 13, 2014, we issued an updated research report on Time Warner Cable Inc. TWC. Recently, the struggling cable company decided to sell its business to Comcast Corp. CMCSA for $45.2 billion.

Time Warner Cable has delivered positive earnings surprises in all four quarters last year, with an average beat of 4.16%. The company reported mixed first-quarter 2014 financial results with the bottom line beating the Zacks Consensus Estimate but the top line missing the same.

Recently, Time Warner Cable teamed up with global WiFi service provider, Boingo Wireless, to deliver roaming services to its customers. Moreover, the successful integration of DukeNet coupled with increased ad spending in 2014 will continue to lend support to the Business Service division of Time Warner Cable.

Moreover, lower video subscriber loss, improving ARPU, hike in dividends and implementation of several growth strategies may act as tailwinds for the company in 2014. Furthermore, upgrading its lower tier subscribers to upper tier will further drive ARPU for the company. Time Warner Cable intends to complete the deployment of a cloud-based guide to 6 million set-top devices by the end of 2014. In addition, the company's plans to boost network speed by segregating different markets into TWC Max fully-digital markets  should also prove favorable for the company.

On the downside, Time Warner Cable is facing the brunt of growing competition as large telecom operators, such as Verizon Communications Inc. VZ and AT&T Inc. T are gaining strong foothold in this area. Moreover, low-cost video streaming offerings by companies like Netflix and Hulu will further affect the company's subscriber growth.

Likewise, Time Warner Cable's highly leveraged balance sheet, mounting programming costs and deteriorating cash position may act as headwinds for the company while moving ahead.

Time Warner Cable currently carries a Zacks Rank #3 (Hold).

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