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TheStreet Open House

Will Time Warner Cable (TWC) Stock Be Affected By Major Outage?

Stocks in this article: TWC

NEW YORK (TheStreet) -- Time Warner Cable Inc. (TWC) reported a massive network outage that shut down Internet services to some 11 million customers on Wednesday, prompting New York state to launch an investigation, Reuters reports.

The outage affected 2% of all U.S. Internet networks, according to Renesys, a firm that monitors global Internet activity

Time Warner Cable said services were "largely restored" by 6 a.m and "a majority, if not all" were back on line as of 8 a.m.

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Shares of Time Warner Cable are slightly higher at $147.06.

TheStreet Ratings team rates TIME WARNER CABLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TIME WARNER CABLE INC (TWC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.40% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TWC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TIME WARNER CABLE INC has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TIME WARNER CABLE INC reported lower earnings of $6.71 versus $6.91 in the prior year. This year, the market expects an improvement in earnings ($7.74 versus $6.71).
  • Net operating cash flow has slightly increased to $1,695.00 million or 9.28% when compared to the same quarter last year. Despite an increase in cash flow, TIME WARNER CABLE INC's average is still marginally south of the industry average growth rate of 13.29%.
  • 35.87% is the gross profit margin for TIME WARNER CABLE INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.71% trails the industry average.
  • You can view the full analysis from the report here: TWC Ratings Report
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