Yesterday, Time Warner Cable Inc (NYSE:TWC) released its fourth-quarter earnings report. Time Warner Cable posted subscriber gains while also reporting an increase in costs.
Is now a good time to buy TWC shares? Find out now.
Time Warner Cable – Company Profile
Time Warner Cable is a name you’re probably familiar with. TWC is the second-largest cable operator in the U.S., offering the usual services of video, high-speed data and voice over its broadband cable systems to residential and business customers.
Currently, Time Warner Cable has operations in New York, the Carolinas, Ohio, Kentucky, Wisconsin, southern California and Texas and employs more than 51,000 full-time employees.
Last February, Comcast Corporation (NASDAQ:CMCSA) announced plans to buy Time Warner Cable in an all-stock deal for $45 billion. Under the terms of the deal, which is subject to regulatory approval, each TWC share will be exchanged for 2.875 shares of CMCSA.
Time Warner Cable – Earnings Rundown
In the fourth quarter, Time Warner reported a 3.8% year-over-year increase in revenue, rising to $5.79 billion. TWC posted a net income of $577 million or $2.03 per share, a 12% increase from the previous year. This missed analysts’ estimates of $2.08 per share on revenue of $5.81 billion due to an increase in TV programming costs and promotions to draw in subscribers.
Despite the jump in costs, the promotions seem to have worked; Time Warner had its best subscriber numbers in seven years. TWC lost 38,000 in residential cable customers and gained 295,000 residential voice customers in addition to 168,000 residential high-speed Internet clients.
Looking ahead to 2015, Time Warner expects to start the year with “tremendous operating momentum,” according to CEO Rob Marcus.
Time Warner Cable – Current Ratings
Now, if you go to the stock report page for Time Warner Cable, you’ll notice that TWC stock has gone from a “buy” to a “hold” in recent months, which can be attributed to TWC stock’s mediocre buying pressure as it receives a C for its Quantitative Grade.
TWC stock’s fundamental metrics are also lackluster, with return on equity (A) being Time Warner Cable’s only strong point. As for the other seven metrics, TWC could improve its sales growth (D), operating margin growth (C), earnings growth (D), earnings momentum (C), earnings surprise (D), analysts’ earnings revisions (C) and cash flow (C). Overall, TWC receives a C for its Fundamental Grade.
As of this post on Jan. 30, I consider TWC stock a C-rated “hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
