January 31, 2013 at 10:22 AM EST
Time Warner Cable Q4 Profit Drops Despite Higher Revenue; Boosts Dividend by +16% (TWC)

On Thursday the country’s second largest cable provider Time Warner Cable Inc (TWC) posted a -9% drop in profit in the fourth quarter, but beat the Wall Street estimates. The company also declared a rise to its next quarterly dividend.

The New York, New York-based company reported a fourth quarter net income of $513 million, or $1.68 per share, down from $564 million, or $1.75 per share, earned in the prior year period.

Adjusted net income rose to $479 million, or $1.57 per share, from $447 million, or $1.38 per share, earned a year earlier. Analysts, according to Thomson Reuters, were expecting TWC to report an adjusted EPS of $1.55.

Time Warner Cable’s fourth quarter revenue increased +10% to $5.49 billion. The consensus analyst view was that the company would post a revenue of $5.50 billion.

Despite the earnings and revenue beat, the company added fewer high-speed internet users than analysts had expected. As cable providers shed cable TV subscribers, high-speed internet growth is crucial to stay profitable.

The company also announced a +16% raise to its quarterly dividend, from 56 cents per share to 65 cents per share; the annual dividend is now $2.60 per share. The dividend will be paid on March 15 to stockholders of record on February 28.

Time Warner Cable shares were down $6.96, or -6.91%, during morning trading on Thursday. The stock is up +27.46% over the past year.

The Bottom Line
Shares of Time Warner Cable (TWC) will now have a dividend yield of 2.77% based on the higher dividend payout and Thursday’s intraday price of $93.78.

Time Warner Cable Inc (TWC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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