Time Warner Cable Inc.
) is scheduled to report its first-quarter 2014 results before
the opening bell on April 24, 2014.
Why a Likely Positive Surprise?
Our proven model shows that Time Warner Cable is likely to
beat earnings because it has the right combination of two key
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +0.60%. This
is a meaningful and leading indicator of a likely positive
Time Warner Cable currently has a Zacks Rank #3. Note that stocks
with Zacks Ranks of #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a
significantly higher chance of beating earnings. The Sell-rated
stocks (Zacks Rank #4 and 5) should never be considered going
into an earnings announcement.
The combination of Time Warner Cable's Zacks Rank #3 and +0.60%
ESP makes us reasonably confident in looking for a positive
What is Driving the Better-Than-Expected
The U.S. pay-TV industry is facing significant challenges from
several fronts. Economic volatility in the U.S., growing
competitive threat from fiber-based TV services of telecom
operators, and availability of cheaper substitutes, such as
online video streaming services, have imposed mounting pressure
on the traditional pay-TV operators, and Time Warner Cable is no
As a survival strategy, management has decided to implement a
three-year plan: adding significant residential customers and
maintaining the momentum in the upcoming quarters, gaining
customer confidence by means of enhancing customer service, and
deploying advanced and innovative video services which include
cloud-based guide, VOD and DVR products. We view the change in
Time Warner Cable's business model favorably.
However, persistent loss of video customers despite implementing
several strategies is a major concern. Except for Time Warner
Cable, almost all cable and satellite TV operators gained video
subscribers in the previous quarter.
Other Stocks to Consider
Other companies you may want to consider on the basis of our
model which shows that these have the right combination of
elements to post an earnings beat this quarter include:
Dish Network Corp.
) with earnings ESP of +4.65% and Zacks Rank #3.
Charter Communications, Inc.
) with earnings ESP of +40.0% and Zacks Rank #3.
) with earnings ESP of +3.36% and Zacks Rank #3.
CHARTER COMM-A (CHTR): 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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