Time Warner Cable Sparks Sector Rally


Time Warner Cable helped spark a rally in cable MSO stocks Thursday, as its own shares reached a new 52-week high after reporting strong first-quarter earnings.
Time Warner Cable shares rose as high as $57.58 each in Thursday trading, a $4.45 (8.4%) increase from the previous day's close of $53.13. The shares fell back slightly in later trading priced at $57.21 (up $4.09 or 7.7%). Still, the MSO soundly beats its previous 52-week high of $55.57 per share.
Time Warner Cable reported first-quarter earnings Thursday morning, with revenue and cash flow up 5.4% and 10.9%, respectively. It was the first time in two years the MSO reported double-digit cash flow growth.
Time Warner also reported strong high-speed data subscriber growth (212,000) and digital phone customer growth (86,000) in the period, which added to investor optimism.
The results helped lift other publicly traded MSOs. Comcast, which reported its own strong first-quarter results Wednesday, rose as high as $20.08 per share (up $1.27 per share or 6.8%), surpassing its old 52-week high of $19.20 per share. The stock was trading at $19.99 each (up $1.19 each or 6.3%) in late afternoon trading.
Other cable stocks that have yet to report earnings also appeared to benefit. Cablevision, which will report its first- quarter earnings on May 6, saw its shares rise as high as $27.45 each (up $1 each, or 3.8%) in early trading Thursday, just missing its 52-week high of $27.73. The stock was trading at $27.35 each (up 90 cents or 3.4%) later in the afternoon.
Mediacom Communications appeared to get the least benefit from the rally, rising to $7.30 each (up 26 cents) in early trading. It was priced at $7.19 each (up 15 cents or 2.1%) in the late afternoon.