Time Warner Cable delivered strong Q4 results, beating Wall Street expectations for both profits and subscriber numbers. That has Wells Fargo Securities analyst Marci Ryvicker excited. The NAB is also excited, although perhaps not for the same reason.
“TWC scores a tri-fecta with a beat in financials and subs in addition to unexpectedly replenishing its $4B buyback and increasing the dividend by 17%,” declared Ryvicker in a note to clients. She is maintaining her “outperform” (buy) rating on the stock and raising her valuation range to $82-84 per share from her previous $74-76. The stock has recently moved back up above $70 from a low point of $57.15 back in November.
Stepping up to congratulate the cable giant was the National Association of Broadcasters (NAB).
“Given that Time Warner Cable just announced a quarterly net income increase of 44% and annual profits of $1.3 billion, it’s time for pay TV’s poster child for skyrocketing rates to come clean on retransmission consent. Time Warner and its front group the American Television Alliance claims that broadcast retransmission consent fees are responsible for escalating cable rates. That claim is false. The fact is that local TV station carriage fees account for less than 1 percent of the cost of a monthly cable bill,” said NAB Executive VP of Communications Dennis Wharton. “It’s laughable to suggest that broadcasters are responsible for higher cable rates.”
Wharton noted that according to data compiled by SNL Kagan, the average cable bill has risen at a rate faster than inflation. In addition, a filing submitted to the FCC by NAB found that in 2010 retransmission consent fees were approximately six-tenths of one percent of a pay-TV operator’s revenues.