Is Time Warner Cable (TWC) Poised to Beat Earnings Estimates? - Analyst Blog


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Time Warner Cable Inc. ( TWC ) is set to release its fourth-quarter fiscal 2013 results before the opening bell on Jan 30, 2014.

In the last quarter, the company delivered a 3.05% earnings surprise. Let's see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Continuous deployment of the DOCSIS 3.0 technology across its footprints coupled with rate hikes and launch of popular sports channels in the U.S. will drive Time Warner Cable's top-line growth, while moving ahead. Moreover, signing deals with different sports majors and the launch of several devices will further act as tailwinds for the company.  

On the downside, persistent loss of video subscribers remains the primary cause of concern for Time Warner Cable as customers are opting for cheaper video streaming service providers like Netflix, Hulu.Com and YouTube.

Earnings Whispers

Our proven model does not conclusively show that Time Warner Cable is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

Zacks ESP: This is because the Most Accurate estimate is poised at 67 cents while the Zacks Consensus Estimate stands at 68 cents. This leads to an ESP of -1.16% for Time Warner Cable.

Zacks Rank #3 (Hold): Time Warner Cable's Zacks Rank #3, decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -1.16% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

TiVo Inc. ( TIVO ) has Earnings ESP of +33.33% and carries a Zacks Rank #3.

Shaw Communications Inc. ( SJR ) has Earnings ESP of +2.63% and carries a Zacks Rank #3.

DIRECTV ( DTV ) has Earnings ESP of +2.34% and carries a Zacks Rank #3 (Hold).

DIRECTV (DTV): Free Stock Analysis Report

SHAW COMMS-CL B (SJR): Free Stock Analysis Report

TIVO INC (TIVO): Free Stock Analysis Report

TIME WARNER CAB (TWC): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
More Headlines for: DTV , SJR , TIVO , TWC

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