NEW YORK (TheStreet) -- The U.S. Federal Communications Commission is delaying its review of the proposed merger between Time Warner Cable (TWC and Charter Communications (CHTR), according to a letter it sent to the companies.
The delay will give regulators adequate time to review the $56 billion merger and new information filed from the companies in December, Reuters reports. The commission delayed their informal deadline by 15 days and will finish their review on January 20.
Regulators will review the proposed merger's effect on the distribution of Time Warner's regional sports networks and Charter's residential pricing, packaging procedures and a new proposal for an inexpensive broadband service, Reuters noted.
In May, Charter said it would buy its rival in a cash and stock deal, creating the second largest internet and cable company in the U.S. after Comcast Corp. (CMCSA).
Time Warner is a provider of video, high-speed data and voice services with cable systems in New York, the Carolinas, the Midwest, Southern California and Texas.
Shares of Time Warner closed at $183.08 on Monday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate TIME WARNER CABLE INC as a Buy with a ratings score of B. This is driven by multiple 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 revenue growth, good cash flow from operations, solid stock price performance and notable return on equity. We feel its 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has slightly increased to $1,500.00 million or 3.59% 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 8.97%.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Media industry and the overall market, TIME WARNER CABLE INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- TIME WARNER CABLE INC's earnings per share declined by 13.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TIME WARNER CABLE INC increased its bottom line by earning $7.17 versus $6.71 in the prior year. For the next year, the market is expecting a contraction of 7.9% in earnings ($6.60 versus $7.17).
- You can view the full analysis from the report here: TWC