Yesterday, the Board of Directors of
Time Warner Cable Inc.
) decided to hike its regular quarterly dividend from 56 cents
per share to 65 cents per share, a significant jump of 16%. The
revised quarterly cash dividend will be payable on Mar 15, 2013
to stockholders of record at the close of business on Feb 28,
2013. In the last three years, the company is systematically
enhancing its shareholders' wealth either through a share
repurchase program or by increasing dividend rate.
Time Warner Cable reported mixed financial results for the
fourth quarter of 2012. Although net earnings surpassed the Zacks
Consensus Estimate, revenue fell below the same. Nevertheless,
the company demonstrated an impressive annualized progress
primarily attributable to: (1) new acquisitions of NewWave,
NeviSite, and Insight, which have enhanced the company's
financials. As a result, the growth rate of revenue exceeds the
growth rate of operating costs (2) steadily growing demands for
residential high-speed Internet services (3) exceptionally solid
performance by its Business Services segment, and (4) growing
Despite these positives, Time Warner Cable has given a
lukewarm outlook for fiscal 2013. Adjusted earnings per share for
fiscal 2013 are expected to be in the range of $6.33-$6.6, up
about 10-15%. This guidance is far below the current Zacks
Consensus Estimate of $6.90. Consequently, the stock price of
Time Warner Cable fell $11.36 (11.28%) yesterday. This was the
company's highest stock price fall in nearly four years.
Management cited that rising programming costs, especially
for sports channels and an expected dip in political
advertisement are the primary reasons for this weak forecast.
Under this scenario, a hike in dividend may strengthen the
stock price. Time Warner Cable currently has a Zacks Rank #3
(Hold). Other major pay-TV service providers include
DISH Network Corp.
). All these three stock currently have a Zacks Rank #3 (Hold).
Comcast and DIRECTV will dealer their fourth-quarter 2012
financial results on Feb 13 and 14 respectively, while DISH is
yet to declare its fourth-quarter 2012 earnings date.
COMCAST CORP A (CMCSA): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
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