Why Time Warner Cable's Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Time Warner Cable (NYSE: TWC  ) fell 12% today after the company issued weak earnings guidance.

So what: Fourth-quarter revenue rose 9.9% to $5.5 billion and earnings per share of $1.57 beat estimates by $0.02. But investors are more concerned about the 2013 earnings forecast of $6.33 to $6.61, which fell well below the $6.91 bar set by Wall Street.  

Now what: Time Warner's costs are rising because of huge sports deals, and investors already have the decline of cable in the back of their minds, so disappointing guidance isn't good. I'm staying away from this stock because I just don't see the long-term value in cable networks that may be replaced by on-demand sources. Time Warner still offers some valuable services to consumer,s but the long-term trends aren't in its favor right now.

Interested in more info on Time Warner Cable? Add it to your watchlist by clicking here.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2228478, ~/Articles/ArticleHandler.aspx, 7/24/2014 1:01:18 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement