A Net Plus For RCN

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Miller Tabak media analyst David Joyce maintained his “neutral” rating and $30 price target on RCN after the cable-system overbuilder reported strong fourth-quarter results.

RCN reported 13% revenue growth and 54% operating cash-flow growth in the fourth quarter, but increased its 2007 capital expenditure guidance to between $100 million and $110 million in a bid to spur lackluster revenue growth. That forced Joyce to adjust his free cash flow estimate for the overbuilder downward from $59 million to $17 million.

Joyce said RCN’s plans to return between $350 million and $400 million to shareholders — most likely through a cash dividend.

Joyce estimated that the cash dividend could be about $10.12 per share, offsetting RCN plans to increase capital spending.