Slight Adjustments To Time Warner Outlook, Deutsche Bank Reports

In addition to favorable sector trends (advantaged broadband pipe, competition stabilized, large SME opportunity, moderating capital intensity, easing regulatory concerns), Time Warner Cable, Inc. TWC has managed costs well, maintaining margins through the recession, despite being early in the programming renewal cycle, Deutsche Bank reports. “Our forecast is little changed, though EPS is increased due to lower amortization and implementing the accretive repurchase plan – ‘10E raised by $0.17 to $3.55 and by $0.16 to $4.01 for ‘12E,” Deutsche Bank reports. “Our ‘10E EBITDA remains $6.886b (+6.1% yoy) and ‘11E remains $7.132b (+3.6% yoy). Key at this point is (1) posting the improved sub growth in 4Q that mgmt suggested on their call; (2) pursuing the repurchase plan aggressively; (3) managing costs in '11 beyond the lower Sprint voice costs given pressures in programming (ESPN) and potentially wireless; (4) continuing to ramp SME revenue and HSD ARPU; and (5) ramping product innovation.” Time Warner Cable currently trades at $62.33.