Time Warner Cable ignites Q3 fears
Analyst reduces cable subscriber estimatesNEW YORK -- Collins Stewart analyst Thomas Eagan on Thursday lowered his subscriber forecasts for cable giants Time Warner Cable and Comcast Corp. after the former said it is seeing weak subscriber trends in the current third quarter.
TWC CFO Rob Marcus had said at a Bank of America investor conference in Newport Beach, Calif. on Wednesday that his firm could lose cable subscribers this quarter as consumers curb home purchases in a weak economy, according to Bloomberg.
TWC shares fell more than 5% as a result.
"Overall, I would say that the subscriber environment is very, very weak," Marcus said.
"Because of these comments we are lowering several of our third-quarter customer estimates for TWC and Comcast," said analyst Eagan. "Conversely, DirecTV's CFO maintained DirecTV's favorable view on third-quarter sub growth."
Eagan now predicts TWC will lose 177,000 basic cable subs in the third quarter, compared with his previous 157,000 estimate.
For Comcast, he switched from a 75,000 decline estimate to a new projection of 129,000 declines.
In a positive note though, Eagan highlighted that Marcus said that currently there were no attractive acquisition targets. "This should assuage concerns about acquisition risk which has hurt the stock lately" amid reports about talks with Cox Communications about a possible cable systems swap or strategic arrangement, he said.