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TWC Faces Service Disruption

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Time Warner Cable Inc. – the second largest cable MSO in the U.S. after Comcast Corp (CMCSA - Free Report) – faced service disruption when more than 88,000 home-phone subscribers failed to make or receive calls.

Such service failures mainly occur due to some technical issues and the engineers from Time Warner Cable are already looking into the problem. They are confident about restoring back services shortly.

Time Warner Cable reported mixed financial results for the fourth quarter of fiscal 2012. The bottom line surpassed the Zacks Consensus Estimate but the top line missed the same. However, total revenue increased 9.9% year over year to $5,485 million. The strong performance was mainly attributed to improved advertising sales, strong high-speed data revenue growth and successful integration of Insight Communications.

Time Warner Cable exited fiscal 2012 with nearly five million Residential voice subscribers. The Residential voice service contributed $527 million in the fourth quarter of fiscal 2012 with an annualized growth of nearly 6.5%.

Therefore, this recent service disruption holds utmost importance for Time Warner Cable as the home-phone business contributes a significant portion to company’s top line. So, any loss of voice subscribers may impact TWC’s Residential Services Segment in the upcoming quarter.

Currently, Time Warner Cable has a Zacks Rank #3 (Hold).

Other Stocks to Consider

Other companies belonging to the same sector are Liberty Global Inc. (LBTYA - Free Report) and Rogers Communications Inc. (RCI - Free Report) . Both these companies carry a Zacks Rank #2 (Buy).

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