Time Warner Cable BUY Target $ 114

Time Warner Cable Sports 32

Time Warner Cable Sports 32 (Photo credit: Wikipedia)

Time Warner Cable

Nov. 6

TWC : NYSE $ 91.93  BUY Pullback Overdone 

COMPANY DESCRIPTION:

Time Warner Cable. Time Warner Cable is the 2nd largest US cable operator. The company serves 12mm basic video subscribers. Time Warner Cable also provides high speed data and phone services

 

Summary

TWC fell approx. 6.36% (in an admittedly down day for PayTV stocks) due to concern with 3Q12 results and prospects that fundamental trends were deteriorating. While true that the results were below many of our est, we believe the pullback was overdone. Moreover, there were several positive trends, including 7% ARPU growth at the TWC Legacy systems, lower HSD churn among wifi users, 22% organic Business Services revenue growth and high-level usage of the TWC.TV apps, which over time should reduce video churn. EPS guidance was increased (due to the spectrum sale) and FY12 FCF guidance was maintained.

The FCF growth is important because it confirms our expectation that TWC is positioned to repurchase $2.5-2.75bn+ (or 9%) of shares in FY13.

 

Highlights

Positive results in 4th Q 2012 – several items  could benefit results, such as impact of the modem fee increase (which the company indicated would be passed through to the bulk of its customers); the LA RSN launch, which appears to be adding video connects in that market; and the 30% advertising growth (due to political).

 Maintaining the FCF guidance translates to 4Q12 FCF of $555m (above our $485m est) and positions TWC to increase its 2013 share repurchases to $2.5- 2.75bn. The new EPS guidance translates to 4Q12 EPS of $1.27 to $1.52, slightly below our $1.63 est.

Time Warner – Waiting For Batman Profits

Warner Bros. Television shield.

Warner Bros. Television shield. (Photo credit: Wikipedia)

Time Warner (TWX : NYSE : US$39.60)

August 2
Time Warner posted a lower Q2 profit as its Warner Bros. movie studio had weaker releases compared with a year ago.

The blockbuster Batman movie “The Dark Knight Rises” didn’t open in theaters until the quarter ended.

While, in the same quarter last year, Time Warner had “The Hangover Part II” in theaters and the next-to-last Harry Potter movie on home video. Net income for the quarter fell to $429 million, or $0.44 a share, compared with $637 million, or $0.59 a share, a year earlier.

Excluding some items, profit of $0.59 a share beat the consensus estimate by a penny. Revenue fell 4% to $6.7 billion. Television networks were strong and represented the largest and most profitable part of the company in the second quarter.

Gains there weren’t enough to offset the declines at Warner Bros. and at the Time Inc. magazine division, which saw sales decline 9%. Looking ahead, Time Warner reaffirmed its outlook for the year. The company said percentage growth in adjusted income should be in the low double digits for the full year as it expects Warner Bros. to do better in the current quarter. It said “The Dark Knight Rises” sold more than $535 million in box office tickets worldwide in the first 10 days, while “Magic Mike,” released just as the second quarter was ending, has sold more than $100 million in tickets in the United States.

Warner Bros., which also produces television shows for CBS and other networks, got orders for 16 returning series and nine new series on U.S. prime-time schedules during the TV season that starts in September.

Google Out = Clearwater Down

Image representing Google as depicted in Crunc...

Image via CrunchBase

Clearwire (CLWR : NASDAQ : US$2.11),

Google (GOOG : NASDAQ : US$609.90),

Shares of Clearwire were trading lower on Friday after a filing showed that Google is looking to sell its entire position in the wholesale mobile broadband provider.

Google will sell its 29.4 million shares for $1.60 each, totalling $47.1 million, a 91% discount to its initial investment. The total loss for Google will be over $450 m illion. The filing read, “Google periodically rebalances its investments based on its goals and its evaluation of market conditions.”

The news comes a week after Clearwire warned that it may need tor raise more capita to fund its operations and that it could not longer offer debt secured by its network assets. In January, the company issued a $300 million bond with a coupon of 14.75%, more than 500 bps higher than debt issued by lower-rated bond issuers. Google, Clearwire and other shareholders Sprint (S), Comcast (CMSCA), Time Warner (TWC) and Bright House Networks declined to comment. An Intel spokesman said that the company had no interest in increasing its 7.3% stake in the company, and that it had written down the value of its 65.6 million Class B shares to zero.

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Barclays Bank Picks for 2012

AMP builds Watchlists in various sectors – then tracks outstanding candidates for possible AM portfolio slots . Here are six worthy of your due dilligence – yhe first three are covered in the new AMP  book due out in the new year.

 

1. General Electric Company (GE): Operates as a technology, service, and finance company worldwide. Market cap of $189.08B. On 10/14/2011, Barclays Capital had an Overweight rating on the stock. The stock has had a good month, gaining 13.64%.

2. Johnson & Johnson (JNJ): Engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Market cap of $179.09B. On 12/09/2011, Barclays Capital had an Overweight rating on the stock. Offers a good dividend, and appears to have good liquidity to back it up–dividend yield at 3.48%, current ratio at 2.46, and quick ratio at 2.17. The stock has gained 9.89% over the last year.

3. Oracle Corporation (ORCL): Develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. Market cap of $128.91B. On 12/06/2011, Barclays Capital had an Overweight rating on the stock. The stock has performed poorly over the last month, losing 18.18%.

4. SAP AG (SAP): Provides business software primarily in Europe, the Middle East, Africa, the Americas, and the Asia Pacific Japan region. Market cap of $65.01B. On 12/06/2011, Barclays Capital had an Overweight rating on the stock. The stock has performed poorly over the last month, losing 11.69%.

5. Time Warner Inc. (TWX): Operates as a media and entertainment company in the United States and internationally. Market cap of $36.17B. On 09/07/2011, Barclays Capital had an Overweight rating on the stock. The stock has gained 15.54% over the last year.

6. VMware, Inc. (VMW): Provides virtualization and virtualization-based cloud infrastructure solutions primarily in the United States. Market cap of $35.12B. On 12/06/2011, Barclays Capital had an Overweight rating on the stock. The stock has performed poorly over the last month, losing 13.95%.

 

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