Time Warner Cable's Second Quarter Earnings Report

Time Warner Cable (NYSE:TWC) announced its results for the most recent quarter on August 2, 2012. Time Warner Cable, together with its subsidiaries, is a cable operator in the United States.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Everything Investors Need To Know About Earnings

The Numbers: Time Warner Cable managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $1.43 per share versus the $1.38 per share estimate and revenues of $5.4 billion versus the $5.13 billion estimate. EPS rose 15.3% while revenue climbed 9.3% from the same period last year. Time Warner Cable's revenue has grown during each of the past four quarters on a year-over-year basis. Net income for the second quarter was up 7.6% to $452 million. Last quarter marked the third in a row of rising net income.



A Look Back: Net income has increased 18.1% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 43.9% from the year-earlier quarter.



Looking Ahead: Analysts appear increasingly optimistic about the company's results for the next quarter. The average estimate for the third quarter has moved up from $1.42 a share to $1.46 over the last 60 days. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year has seen a bump from $5.64 per share 60 days ago to $5.65.