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Will Time Warner Cable Beat Earnings?

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Will Time Warner Cable Beat Earnings?

Time Warner Cable Inc. – the second-largest cable MSO in the U.S. – is set to release its first-quarter 2013 results before the opening bell on Apr 25, 2013.

In the last quarter, the company delivered a 1.95% 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. market will drive Time Warner Cable’s top-line growth, while moving ahead. Moreover, signing deals with different sports majors and launching different 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 Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) 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.

Zacks ESP: This is because the Most Accurate estimate is $1.34, below the Zacks Consensus Estimate of $1.37. This leads to an ESP of -2.19% 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 -2.19% 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:

  • AT&T (T - Free Report) has an Earnings ESP of +1.56% and carries a Zacks Rank #2 (Buy)
  • Comcast Corporation (CMCSA - Free Report) has an Earnings ESP of +4.08% and carries a Zacks Rank #3 (Hold)
  • Sprint Nextel (S - Free Report) has an Earnings ESP of +20.00% and carries a Zacks Rank #3 (Hold)

In-Depth Zacks Research for the Tickers Above

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Comcast Corporation (CMCSA) - free report >>

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